Canadian Pork Producers:

[mikey]

Monday, November 16, 2009Print This Page
Pork Producers Advised to Use Needleless Injectors
CANADA - Manitoba Pork Council is encouraging the province's pork producers to take advantage of a new program which offers assistance for the purchase of a needless injector, 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. 
As part of the On-Farm Food Safety Program, offered under the federal-provincial Growing Forward Program, Manitoba Agriculture Food and Rural Initiatives is providing up to two thousand dollars to be applied toward the purchase of a needleless injector.

Manitoba Pork Council quality assurance and labor programs manager Miles Beaudin says needless injectors offer benefits from both a food safety and an animal welfare perspective.

Miles Beaudin-Manitoba Pork Council
The key benefits are probably those reasons why we're pushing to help get this product out here.

The benefits are, from a food safety perspective, it doesn't use a physical hazard which is needles in our food safety program.

Needles sometimes break in the pig and producers lose the pig or they don't notify the packer there's a broken needle and sometimes the pigs end up at the processor.

With using needless injectors that physical hazard is completely eliminated so that's one aspect.

The other aspect is welfare.

Instead of giving a pig a needle, it has a tendency to sometimes create abscesses, swelling, discomfort for the pig.

Needles injectors, you don't puncture the skin and the pigs don't necessarily associate any pain with a needless injector.

I know pigs, they don't even flinch it looks like so it's a lot better system for the pig.

Mr Beaudin says the up front cost of needless injectors range from two thousand to five thousand dollars but the assistance will greatly accelerate the payback period.

[mikey]

Pork Commentary: Govt-Controlled Big Sky Farms Seeks Creditor Protection
CANADA - This week's North American Pork Commentary from Jim Long.
Jim Long is President &
CEO of Genesus Genetics.
Last week the World’s largest Government owned swine operation Big Sky Farms applied for creditor and court protection. Big Sky is considered to be Canada’s second largest swine operation and is owned 63 per cent - 70 per cent by the Saskatchewan Provincial Government. The President and CEO Casey Smit of Big Sky said the company is reorganising so it can access Canada’s federal loan program. What a joke! A government controlled entity reorganising to get more government money! Big Sky has failed and now government upon more government money is being chased to prop up an organization that goes from failure to failure. The whole idea of the Canadian Federal Government loan and transition program is to put the Canadian Swine Industry on a sustainable footing. Further funding of a government owned farm of over 40,000 sows like Big Sky is a slap in the face of all Canadian hog farmers. It’s wrong that a socialist aberration created by the former socialist government of Saskatchewan is being sustained in competition with independent producers. No Government needs to own hog farms. Close them, shut them down. Big Sky Farms creditor protection and Hytek (Canada’s largest hog producer) supposed huge reduction in their sow herd, are a reflection of the challenges our industry face.

We expect several other large entities in Canada and the USA are deeply feeling the harsh reality of financial losses our industry has encountered the last two years.

Tell us it ain’t so Mr Meyer
Steve Myer an economist writing in the National Hog Farmer Weekly Preview last week offended us as Pork Producers. Writing about H1N1 which he referred to as swine flu he wrote about producers - "You can whine and wallow in self-pity and martyrdom or pick yourself up, dust yourself off and get on with life."

Sorry Mr Meyer, we have a hard time taking your lecture. We are not sure you own any hogs? How much skin do you have in the game? Taking lectures from an economist is hard for an industry and people who have lost billions with many losing their farms and livelihood. In fact Mr Meyer, we took your comments as condescending. Why? Producers are not whiners, wallowing in self-pity. Far from it. Producers are proud, independent entrepreneurs who have borrowed money and given their soul to this industry. Producers live in reality; it’s not an academic exercise. Mr Meyer, an apology is warranted to all producers.

Other Observations
We were reading the US National Agriculture Statistics Service statistics. Some observations:

The US average pigs per breeding animal per year was 10 per year in 1980, 17.5 in 2005, and 18.7 in 2008. In about thirty years, 1980 to 2008 an almost doubling of efficiency. In the three years from 2005 to 2008, a jump of 1.3 pigs per year. There has been a definite increase in efficiency. The increase has helped the cost of production to be lower but the extra hogs being produced is increasing pork supply.


In 1980 the United States had a 10 million head breeding herd. In 1982 it had dropped to 8 million. 2 million sows down that was real liquidation. This happened because sows 30 years ago were mostly outside. Capital was invested in inventory not buildings and equipment. It was a lot easier to cut inventories fast.


The hog to corn ratio has been running over the last two years near 10:1. In 1998. 1999, 2001, and 2002 years considered to be unprofitable, we had hog to corn ratio over 15:1. Is it any wonder? It has been so hard.
Corn
The corn crop is late being harvested. There are reports of serious vomitoxins. All efforts will be made to not feed toxins to hogs. There is a good chance vomitoxin corn will still get fed. There will be breeding and some growth problems. 1 per cent effect on each would be market positive.

US Dollar
The continual decline in the US dollar is positive for pork exports and price enhancing for US pork producers. Expect continually strong pork exports especially if access to China and Russia markets is available.

Summary
We are in tough times. Losses still reach over $20 per head. Hanging on is the name of the game. There is light at the end of the tunnel. Hog supply will be lower going forward. The breeding herd continues to get smaller. Pork exports are strong and will be aided by a weaker US dollar. Global grain and soybean supplies are good aiding our cost of production. As H1N1 (swine flu) dissipates, it will be positive for pork demand and market psychology. We expect 2010 lean hog futures have upside of over $5.00 their current level.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Sask Pork to Focus on Range of Objectives
CANADA - The general manager of the Saskatchewan Pork Development Board says the organization's newly installed board of directors will be focusing on a several key objectives over the next 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 past year the number of sows in Saskatchewan has fallen by about 15 thousand to approximately 93 thousand while the number of operating hog farms has fallen to under 200.

Sask Pork general manager Neil Ketilson told those on hand yesterday for the organization's annual general meeting it's all about price and something needs to be done to improve revenues.

Neil Ketilson-Saskatchewan Pork Development Board
First of all we would really make sure that we are as competitive as we possibly can so competitiveness will be a real issue.

As part of that the present government programs and how they're structured and what they do for people will be an important part of that whole thing.

The second thing is we need to be more engaged in the marketing of the product both domestic as well as international so we'll cooperate with Canadian Pork International as well as Pork Marketing Canada and see if can't get the impetus to get people in Canada buying more Canadian pork and more of it so that'll be a major push.

We always work very closely with the Canadian Pork Council and so that'll be an important initiative because the model within the provinces as well as federally will change over time and we would like to be involved in that transition.

The last thing I think we need to do is, over the long term, we really need to have a packing plant in this province to solidify the production growth possibility and the potential that we have so that will remain an objective although it's a very difficult one and we'll be taking baby steps on that.

Mr Ketilson notes the organization's newly installed board of directors will be meeting in the near future for a strategic planning session to set objectives.

 

[mikey]

Monday, November 23, 2009Print This Page
Recommendations When Formulating Swine Rations
CANADA - An animal science professor with the University of Manitoba is encouraging the formulation of swine rations based on the availability of nutrients, writes Bruce Cochrane.


University news is a Wonderworks Canada Production courtesy of the Faculty of Agriculture and Food Sciences at the University of Manitoba.
Visit us at www.universitynews.org 
Swine Nutrition-Distiller Grains and Alternative Feedstocks was among the topics examined this week as part of Saskatchewan Pork Industry Symposium 2009 in Saskatoon.

Dr Martin Nyachoti, with the University of Manitoba's Faculty of Agricultural and Food Sciences, observes nutritionists have recognized the value of using systems that better describe the availability of nutrients in feed ingredients to better match the nutritional requirements of the pig.

Dr Martin Nyachoti-University of Manitoba
For example for supplying energy there are three systems that one can use.
One is the digestible energy system (DE), the other one is the metabolizable energy system (ME) and then the last one is the net energy system (NE).

The net energy system reflects the energy that the pig will actually utilize so, for ingredients that have higher protein content, for ingredients that have high fibre content, it's much more effective to utilize net energy as a system for formulating the diets because the other two systems tend to over-value ingredients that have high fibre and high protein when in actual sense the energy value is a lot less if you were to use the net energy system.

And for amino acids, at least digestible amino acids, ileal digestible amino acids should be used and as I indicated we should use standardized ileal digestibility amino acids in swine formulations because those are a better reflection of how much is available to the pig and there are also more additives in a mixture of feed ingredients so you have a much better way of predicting what the animals will do or how the animals will perform.

Dr Nyachoti says nutrient content and availability in ingredients vary, so by using a system that clearly describes what the ingredient brings to the formula, they can be used much more effectively in swine diets.

[mikey]

Tuesday, November 24, 2009Print This Page
Pork Commentary: Big Sky Saga Continues
CANADA - This week's North American Pork Commentary from Jim Long. 

Jim Long is President &
CEO of Genesus Genetics.
Big Sky Farms, the world’s largest government owned hog farm revealed its financial dilemma in court filings last week. The bottom line: Big Sky owes $96 million with a net income before taxes a huge loss of about $40 million over the last 25 months. Since June 1st, Big Sky has been losing about $2 million a month (details can be found at by clicking here.

The court filings reveal that the Government of Saskatchewan has invested about $30 million in Big Sky (62 per cent of shares). Why a Government would find it necessary or desirable to fund a massive hog operation in competition with taxpaying independent producers are beyond us. Now the wizards that operate Big Sky have amassed $14.7 million in unsecured creditors. In all likelihood these poor creditors (mostly farmers selling grain) will be hung out to dry.

We can find no comments on the situation from economist Larry Martin the Chairman of the Board of Big Sky (Big Shy). We find this interesting since Economist Martin has been never shy over the years telling farmers how they should operate their industry. Missing in action maybe. It is always interesting when economists take their theory of business into the real world. It is no longer an academic exercise. The good news is the current Government of Saskatchewan has announced that they have no intention of sinking more money into Big Sky - $30 million is enough!

Big Sky Farms in their court filings revealed they have 41,994 sows plus the followers, one of the dilemmas they have in reorganization is that their fixed assets are valued at $94,605,000 or about $2,250 per sow. To believe there is a market value close to that in our current industry conditions could be challenging. We are aware that Banks have been offering in Canada good and large sow units that they have taken in control of for around $500 per sow, while offering terms on the debt. Big Sky is dropping currently give or take $500,000 per week. It will need imaginative accountants to get someone to fund further cash. At the end of the day Big Sky Farms should just go away. There should never be Government owned farms. It is morally wrong for Governments to compete with independent farmers. To think Big Sky could re-organize and use Canada’s Government Hog Farm loan guarantee program to save their bacon is bizarre. One Government’s mistake covered by other Government’s. Only viable enterprises can qualify for loan guarantees. What is viable - $40 million in losses?

Brazil
This past week we had some visitors from Brazil (Genesus associates). Like us in North America, Brazilian hog producers have had it tough losing about $25 per head for too long. Consequently, there has been sow liquidation in Brazil. How much liquidation cannot be confirmed as Brazil has no official inventory statistics. The good news for Brazilian and North American producers is that both areas are the two major low cost pork export powers in the world. Both have liquidated. Good bet there will be less pork from both to export in the near future. Both areas need higher prices, we expect in 2010 this will happen.

Other Observations
The latest weekly US sow marketing’s were 66,650. In our opinion liquidation territory. The sow price has recovered with 500 – 550 pound sows for $46.09 per pound last week. The higher sow price is helping cash flow and making it easier for producers to purchase gilts.


Cash early weans averaged on the USDA report $36.78 last week. Formulated prices averaged $36.23. The first time since February cash has surpassed formula. Strong cash early wean prices reflect true supply and demand. Stronger hog prices are coming.


H1N1 appears to have peaked. Thank goodness! The sooner hour upon hour of the media swine flu talk ends – the better. It would help domestic pork demand and enhance export access.


The USDA monthly pork in cold storage was positive. Total pork was 520 million pounds down from 528 last month and last year. Total hams in storage were down 25 million pounds from a year ago. We can thank Mexico for increased ham demand pulling ham supplies down.


Maybe we are looking for positive news too hard but last week’s US daily lean hog carcass weights were lower than the week before. We need hog weights to get in line with lower hog slaughter.
Summary
Some items, such as Big Sky make us sound cynical. Unfortunately, we have seen the pain of real producers who borrowed real money with personal guarantees be financially devastated by hog losses of the last 27 months. It makes us angry when we see the Government funding of Big Sky Farms.

Genesus Awards Woodland
First herd in North America 3 years over 30 pigs weaned


L-R: Terry Hofer, Michael Hofer, Jack Hofer (manager), Andy Gross and Jim Long, President of Genesus
Last week Genesus honoured several of its 66 customers who weaned over 25 pigs in the last calendar year. Genesus is fortunate to have such an excellent group of high achieving producers. It takes diligence and 365 days of intensity to achieve production in the top 8 per cent of all producers.

We congratulate all Genesus 25+ award winners.

Also receiving recognition was Woodland Colony the first herd in North America to reach 30 pigs per sow and now the first in North America to reach 30 pigs per sow for three consecutive years. This in turn has led to an astounding 28.5 hogs marketed per sow per year. Top Producer, Top Result. Genesus congratulates Woodland for these industry leading results.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Tuesday, December 01, 2009Print This Page
Pork Commentary: Swine Forecast Webinar 2010
CANADA - This week's North American Pork Commentary from Jim Long.


Jim Long is President &
CEO of Genesus Genetics.
A few days ago the 2nd annual Swine Forecast Webinar was held. We have pulled some thoughts on the future trends of the industry we believe were relevant.

Dr Tom Elan President Farm Econ LLC.

From 1961 to 2007 Global per capita meat consumption grew from 52 pounds (23kg) to 94 pounds (43kg).
10 per cent increase in per capita spending = 8 per cent increase per capita meat production (obviously a growing world economy enhances meat consumption, getting the global economic recession over would be good for all of us).
What drives the world's meat economy?
How many people are there?
How much money do they have to spend?
How much are they willing to spend on meat?
Meat Production/Consumption
Global production growth is normal
2009 may see a small decline
Per capita supply will certainly decline
US Total Meat Consumption
Peaked in 2007
Declined in 2008 and 2009
Forecast to decline again in 2010
First 3 year decline in history. (Editor's note. USDA projecting meat and pork per capita consumption decline in 2010. We cannot find their reasoning anywhere.)
Pig meat Production Growth 2010 versus 2009(projected)
NOTE: We are not sure about increase - our contacts in Brazil are saying liquidation.

Brazil +4 per cent
Canada -7 per cent
China +4 per cent
EU 27 -1 per cent
Japan -1 per cent
Mexico +2 per cent
Russia -2 per cent
USA -3 per cent

Global Pig Meat Export Overview
Pig meat exports will pick up in 2010
Demand in developing countries outgrows their production capacity
US and Brazil are especially expected to benefit from increases in export business.
Lee Fuchs Farm Credit Services FCS
Underwriting Guidelines Swine
Total Equity/Total assets >50 per cent
Current assets - Current liabilities >1.30
Cash flow >11.5 per cent
Loan/Appraised Value <65 per cent
Marketing Risk Mitigators
Marketing agreements
Hedging Policies
Quality Genetics (editor's note: very important)
Location of Finishing Operations
Management's Marketing Skill
Counter - Party Risk
Strong Liquidity Position
Production Risk Mitigation
Nutrition Programs
Specialized Management and Labor
Bio - Security and Herd Health
Quality Genetics (editor's note: there it is again)
Quality Facilities and Location
Pig Flow Methods
Strong Liquidity Position
Input Cost Risk Mitigations
Feed Purchase Agreements
Dedicated Feed Mills
Hedging Policies
Facility Location
Available Labor Force
Fixed Interest Rates
Strong Liquidity Position
Example of Current Financial Burn Rate (Cash)
20,000 Sows Farrow to Finish (US Dollars)
Cash operating Expense $.44 pound
Debt Service $.04 pound
Maintenance Capital Expenditures $.02 pound
Total Cash Uses $.50 pound
Cash Receipts $.40 pound
Burn Rate $.10 pound
Loss of $1,000,000/month.

Key Factors for Success
Good Liquidity
Financing from Creditors
Investing from Owners
Cash Flow from Operations
Mitigate Volatility
Contracts with Key Parties
Production Levels
Hedging
Low cost Producer?
Balance Sheet Leverage?
John Stadler - BMI Group
The Perfect Storm
Feed Costs (Corn Ethanol)
Economy (Domestic and Global)
Production Gains
H1N1 ( unfortunately called Swine Flu)
Pork Supply
Export Volumes (Market access due to H1N1)
Changing Packer Profile
Upstream Integration
More Concentrated
More Branding
More Value Added Products
Changing Roles (i.e. financing)

Accumulated Equity in Hog Production
Estimated of $7.5 billion in Accumulated Equity in the summer of 2007. Since then, an estimated accumulated equity has gone to a minus. (Editor's note: truly a shocking statistic and if correct we have an industry with little capacity to withstand many months.

Challenges for the Future
Risk Management - Equity Preservation
Marketing Hogs and Meat(different contracts)
New Meat Markets(exports, products)
Competition from other Meat sectors
Strategic Alliances - Relationships
Summary
All interesting perspectives. The bottom line you don't need to look hard to find how bad our business has been. We are of the opinion that Canada - USA - Brazil pork supply is declining. As major global pork export availability declines, prices will become more positive. We continue to believe decreased supply and enhanced demand domestically and globally will push summer lean hog futures beyond 80 cents lean.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

H1N1 Not Feared as Pathogenic But Still a Concern
CANADA - A Steinbach swine veterinarian says, in hindsight, the novel H1N1 flu has been less pathogenic than at first feared but it remains a threat, 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. 
Zoonotic diseases was among the topics discussed last week as part of Manitoba Hog days 2009 in Brandon.

Zoonotic diseases are diseases that can be transferred among animals and people and they have recently gained public attention as a result of the H1N1 outbreak.

Dr Peter Provis, with Steinbach based Swine Health Professionals, told those on hand most diseases are species specific and will infect only pigs or only cattle or only people but on occasion these viruses will cross the species barrier.

Dr Peter Provis-Swine Health Professionals
There's been a long history influenzas in people.

The big one of course was the Spanish flu in 1918 and it wasn't dissimilar to this virus that's arisen lately and I think that's why there's been a lot of concern in the eyes of the public health officials and it's difficult or impossible for them to predict whether it's going to be pathogenic or not.

We are blessed with hindsight now.

We can look back at a couple of waves of this virus or this infection and see that at the end of the day it hasn't been as pathogenic as we had first feared but perhaps it hasn't all been played out yet and there's a potential for this virus to change and that is why public health officials are vigilant and they're still urging people to get vaccinated.

This virus has not primarily been an animal virus.

It seems like from it's origin to this point it's been primarily a people to people thing.

We don't see much of it in pigs.

It does not affect the poultry industry.

There has been some noted in turkeys but the bulk of this virus is residing and moving and transferring within the human population.

Dr Provis says we've seen a number of the emerging zoonotic diseases arise in areas where there is a lot of interspecies contact, pigs living with chickens living with people and cattle where there is close intimate contact and the ability for these viruses to intermingle and change.

[mikey]

Pork Commentary: Better but Not Good Enough
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
Iowa – Southern Minnesota’s lean hog price averaged $62.30 last week which is at a price that most producers are losing money. Hog prices have gotten better from the dismal lows of the last months, but still there is little financial relief. Unfortunately, the massive equity crater that has been created over the last two and a half years is getting no smaller. The brutal reality of the financial situation is continuing to take producers out of production. Weekly we hear of sow units quitting voluntarily or involuntarily. This carnage continues to cut our production base.

Other Observations
In the last month, March corn has gone from $4.25 to $3.50 a bushel – that is a 75 cent a bushel decrease. March Soybean Meal has decreased from $310 a ton to $270 a ton in the last month. Put together in the last thirty days feed costs to produce a market hog has decreased $10.00 per head. It’s going in the right direction.


Corn and Soybean prices have not only come under pressure from what the USDA has projected as record domestic production but from ongoing reports from South America where both Argentina and Brazil are expecting to record production. We can only hope that all the bearish grain news pounds the prices lower. In the last month the price of crude oil has dropped from about $84 to $71. We can only hope oil drops further, giving the people who burn corn for ethanol continued challenges.


US hog marketing’s have now been down year over year for five consecutive weeks. The current average lean cost of 51 – 52 per cent hogs is 64.71 while a year ago the lean price was 57.47. The real good news is hog marketing’s have been down well over 4 per cent a week but average lean hog carcass weights are averaging about 2 pounds less than last year. Less hogs, less pork tonnage and lighter weights certainly don’t indicate anything but a current hog inventory.


The USDA cash early wean and feeder pig report last week indicated prices that have held despite the drop in lean hog futures over the last three weeks. Cash early weans averaged $46.34, 40 pound feeder pigs $67.18. At these prices small pig producers are making money. It is a long way from the $5.00 pigs of mid August.


The sow herd is old. We have seen several sow parity reports of Genesus customers. Lots of herds with a high per centage of sows six plus parities. All herds generally drop born alive after six plus parities. This will impact productivity. At some point there will be a massive influx of gilts needed. It’s like the car industry, as car age increases, the pent up demand (need) for new cars increases.


There are increasing reports of mould and mycotoxin issues in the US corn crop. There is significant testing available and mould inhibiters. We suspect and speculate that there will still be breeding and growth problems in some production herds. If it only affects 1 per cent of both and it leads to fewer pigs and less pork. Price enhancing.


Canada’s National Financial Program to take hog producers out of production has accepted the equivalent of 104,000 sows to stay out of production for three years. We expect the number will exceed 120,000 sows by the time the program is completed. Fewer sows in Canada cuts North America’s production base and supports prices. Canada’s days of the world’s largest pork exporter are over.
Pork Continues to make demand strides
Last week the President of Argentina discussed the Viagra like merits of pork consumption. Now Maple Leaf Foods sponsored a National survey which confirms Canada’s love for bacon. Keep the good news coming!

[mikey]

Thursday, February 18, 2010Print This Page
CME: January Hog Inventory Smallest in Twelve Years
US - Statistics Canada released on Tuesday its semiannual Cattle Statistics and quarterly Hog Statistics reports which provide government estimates of cattle and hog inventories, according to Steve Meyer and Len Steiner.



The theme for the Canadian beef and pork sectors is the same as that of their US neighbors: Downsizing. But in Canada, the reductions are much more dramatic due to the negative impact of a strong Canadian dollar on Canadian producers’ revenues. That same stronger Canadian dollar means lower costs as well but the exchange rate does not impact costs and revenues equally. For example, most Canadian observers estimate that about 50 per cent of Canadian pork producers’ costs are indexed to the value of the dollar while virtually all of their revenues are tied directly to the dollar. When a rising Canadian dollar (a downward move of the line in the graph below) reduces all revenue and only half of costs, it takes no math wizard to see the negative impact on profits.


And thus declining cattle and hog inventories beginning in 2006 — well before the surge in feed costs that began in 2007.

Some highlights from Tuesday’s reports are:

Total cattle inventory on 1 January of 13.015 million head was the lowest in 15 years. That total was 1.3 per cent lower than one year ago.


The 4.170 million beef cows on Canadian farms on 1 January were the fewest since 2000. The herd is also 4.3 per cent smaller than on 1 January 2009.


The 1 January stock of all beef cattle was 7.924 million head, 2.8 per cent lower than one year ago.


Canadian cattle and calf slaughter in 2009 was 3.7 per cent lower than in 2008 and Canadian cattle exports were down 32 per cent from 2008 — a fact at least partially attributable to the US’s mandatory country-oforigin labeling program which went into effect last year.

Canada’s hog inventory on 1 January was 11.6 million head, 4.5 per cent lower than one year before. Of the major Canadian hog production provinces, the 2009 decline was the largest in Ontario at 236,000 head and 7.6 per cent. Hog numbers dropped by 5.3 per cent in Alberta as well. The smallest decline among the major hog provinces was in Manitoba (-1.9 per cent), the home of Canada’s newest and most competitive packing plant in Brandon.


The January hog inventory was the smallest in 12 years.


Canada’s sow herd fell to 1.335 million head , 4.3 per cent lower than one year earlier. That year-on-year decline compares to 4.5 per cent in October and puts the Canadian herd nearly 300,000 head (18.3 per cent) smaller than at its peak on 1 January 2005.


Canada’s pork producers farrowed 724,600 litters in the Oct-Dec quarter. That number is 7.9 per cent lower than one year earlier and the report estimates the same year-on-year decline for the fall pig crop. These numbers do not square well with a dow herd that is only 4.3 per cent smaller than one year ago.

[mikey]

Pork Commentary: H1N1 Off Media Radar
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
Iowa – Southern Minnesota lean hog prices gained $2.50 per pound from Friday to Friday last week (Friday averaged $64.92). Weekly hog marketing’s were 2.161 million down 3.1 per cent from last year. So far no week in 2010 has been less than 3 per cent lower year over year. There is definitely fewer hogs now and in the future.

Other Observations
Pork demand is improving. For the week of February 648,500 pounds of pork bellies were taken out. A year ago in the same week there was 1,402 put in storage. A year over swing of almost 1,900. This is strongly counter – seasonal. If this keeps up there will soon be few bellies in storage. The only way to slow demand will be higher prices. Hog prices will go up.


Last week sow prices pushed higher. 450-500 pound sows reached $53.26, almost double from August during the H1N1 (swine flu) scare. Higher sow prices are a reflection of sausage demand relative to sow marketing’s. Higher sow prices will now allow some of the old sows that have been held for an extra litter to be sent to town. A 500 pound sow will now bring $266 this is more than enough to replace with a quality gilt. USA sow marketing’s the week of 30 January were 57,784 – a number that in our opinion shows no net liquidation. Sow prices will remain high over the coming months.


Chicks placed for poultry meat production the week of 10 January were down 5 million from the same week a year ago. There is little indication of increased poultry production. This is positive for hogs.


A further reflection of pork demand is the US Pork Exports Preliminary Data we have seen indicates December was almost 15 per cent higher than the previous December. The highest monthly year over year increase in 2009. On the whole in 2009, annual US pork exports were down 8.3 per cent. Year over year gains in December are being led by Mexico up 27 per cent December to December and Russia is up 86 per cent. What this tells us is the H1N1 scare is over, global demand is increasing and all of it points to stronger prices as we go forward.


H1N1 seems to have fallen off the media radar. Thank Goodness!! The big scare turned into a sad joke. 40 times more people died of regular flu. The billions of dollars spend domestically and globally on vaccine was a big waste. Millions of doses of H1N1 vaccine sit begging for victims. Big Pharma, Their bottom line bloated by stupid media and politicians. The good news is the H1N1 (swine flu) debacle seems to have had little lasting effect on pork demand. While May to August US pork exports during the height of the H1N1 scare were off 20 per cent. In the last two months of 2009 pork exports were up 13 per cent, a positive swing of 33 per cent. You need to look no further than this statistic to see why lean hog prices were 50 cents in August and in the 60’s in November – December despite hog production 10 per cent higher due to normal seasonal pork supply. As hog supply continues to fall in the spring strong exports will push hog prices higher. No one is afraid of the boogey man swine flu anymore.


The USDA is estimating that combined beef, pork, broiler, and turkey production for 2010 will be 90135 million pounds down from 2009’s 90598 and down a whopping 3.5 million pounds from 2008 (93586). 2010 will be the first time in over forty years that total US red meat and poultry production will be down two years in a row. It is equivalent on a per capita basis per pound according to the USD.A. of an 8 pound decline form 2008. (2008 215.9 pounds, 2010 207.9 pounds).
Total meat and poultry protein availability is a big factor why we are bullish on lean hog prices. Pork exports are recovering. Hog supply is declining. Overall, the domestic and global economies are recovering. Per capita income is absolutely proven to be a demand enhancer for pork consumption. The H1N1 (swine flu) debacle is mostly behind us. Roll all of these factors together and it creates a scenario that could lead to 90 cent lean hogs.

Genesus Announcement
We are pleased to welcome two new territory managers to the Genesus Team.

Leighton Siemens – Manitoba
Leighton joins Andrew Curry in expanding and enhancing Genesus’ sales and service in Manitoba. Leighton recently worked with his family in operating a large sow operation with all Genesus Genetics weaning over 25 plus pigs.

Family includes Gaylene, his wife of 18 years, 12 year old son Trent and 8 year old daughter Savannah. They live in Morris, Manitoba where Leighton is President of the Minor Hockey Association.

Leighton's experience owning and running a highly productive sow operation with Genesus Genetics and his passion for the swine industry will be beneficial to all present and future Genesus customers.

David Borsboom – Alberta, Montana, Saskatchewan
Dave joins the Genesus Sale and Service team and will work in conjunction with Gerald Hoftyzer in Alberta, Montana and Saskatchewan. Dave, who lives in Coaldale – Southern Alberta, joins Genesus after ten years in the nutrition business, prior to that Dave managed swine facilities that were involved primarily in genetics.

Dave strongly believes in customer service along with his extensive experience in hog production and swine nutrition will be a powerful combination.

Genesus welcomes Leighton and Dave aboard.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Pork Commentary: Combined USA - Canada Inventory
CANADA - This week's North American Pork Commentary from Jim Long.


Jim Long is President &
CEO of Genesus Genetics.
Last week the USA – Canada Hogs and Pigs Inventory was released. The decrease in the breeding herd and market numbers are remarkable.

December Inventory
USA – Canada (Thousands)
  2007 2008 2009 2007 compared to 2009
Kept for Breeding 7,745 7,457 7,185 -560
Market 74,242 71,872 70,252 -3,990
Sows Farrowed 4,009 3,815 3,699 -310
Pig Crop 37,644 36,521 36,014 -1,630

The decline in sow numbers and market hogs reflect the grim reality of our industry over the last three and a half years. A decline of 560,000 sows, in the last two years means USA – Canada has averaged 5,000 sows a week going out of production. Unfortunately, almost all exiting was followed by a trail of tears. There has been few who have exited for any other reason other than not enough capital and/or courage.

The market inventory has gone down the last two years 4 million. If we use a 25 week cycle from birth to market (175 days) that means we can expect about 160,000 less market hogs a week combined USA – Canada over the next few months compared to 2008. This is a huge decline.

310,000 less sows farrowed USA – Canada last quarter with a pig crop 1.630 million less than the same quarter two years ago. All statistics are a stark reminder on how bad the business has been.

560,000 sows and 4 million less market hogs; if we value sow units @ $1,000 a sow and nursery – finishers @ $100 a space. Our farmer arithmetic comes up to a potential one billion dollars of facilities (or at least minimum invested) of idled production capacity. Bad news for all the people who have money invested (including banks). It’s going to take a while for money to come available for new facilities due to the above scenario. In the meantime all present infrastructures are getting older. The swine facilities that sit idle have a short shelf life in our opinion. If they sit empty very long they rust out.

Why are we using statistics comparing a 2 year snapshot? Last year H1N1 (swine flu) dramatically altered demand domestically and globally. Hog prices would have been dramatically higher if not for a wall of swine flu talk from our media and government from April until November. Having your product (pork) associated with a perceived global pandemic that could kill 100’s of thousands of people is not a pork demand driver. This year 2010 there will be no swine flu scares and we have 4 million less hogs in inventory (USA – Canada) than two years ago. This can only enhance domestic and global pork demand. Keep in mind USA pork exports were up 15 per cent in December year over year. Last year swine flu did not hit until April when pork exports fell in the next few months 20 – 30 per cent. Maybe we are too optimistic but we expect USA – Canada pork exports to be 30 per cent higher this spring – summer compared to last year. The biggest limiting factor on pork exports could be availability of hogs (4 million less). You can’t sell what you don’t have.

Another positive factor is the improvements being seen in the North America and global economies. The USA GDP last quarter was up over 5% year over year, no matter how you cut that, it is going in the right direction with 25 per cent of the world’s GDP a USA economy growing helps many other countries. What this means to pork demand is that with 46 per cent of all meat protein consumed in the world a stronger global economy will stimulate pork demand. There is an absolute correlation between increasing per capita income and protein meat consumption. Bottom line: in most of the world, higher incomes do more for hog farmers than carrot growers. Most people want to eat meat not be vegetarians.

According to The Food and Agriculture Organisation (CFAO) of the United Nations published on the February 18. We quote:

“Rising incomes, population growth and urbanisation are the driving forces behind a growing demand for meat products in developing countries – and they will continue to be important. To meet rising demand global annual meat production is expected to expand from 22.8 currently to 46.3 million tonnes by 2050.”

That’s doubling of global meat production over the next 40 years, or about 6 million tones more a year each and every year. Folks aren’t producing wagon wheels for covered wagons. We are producing pork for a dynamic and growing market. There is a future in pork production.

Responsibility
We all know what swine flu (H1N1) did to our industry. It cost us $2 – 3 billion in North America maybe $10 billion globally in lost revenues. It was a disaster. We can’t but think of the poor producers in Alberta Canada who got his farm quarantined for swine flu. He was put in purgatory. No one to help him – caught in between government regulations and consumer fear. He was left hung out to dry - just as our industry was by our Government. We all lost boat loads of money due to it. If there was ever a time we must be aware of disease sensitivity it is now. Any reckless statements by industry participants relative to diseases in swine must be thought through. The Mass Media loves disease stories. Swine are up on the media radar. All government agencies, university researchers and producers must be responsible. It is our livelihood. Think before you publish!


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

China  lifts ban on Canadian pork
[1 March 2010] Canada's Agriculture Minister Gerry Ritz has confirmed that China has reopened its market to Canadian pork imports. This follows recent negotiations during a trade mission to China. Mr Ritz said the focus is always on the World Organization for Animal Health's (OIE) consensus that Canadian pork and beef is safe. "Access to the Chinese market is excellent news for Canadian pork producers and underlines the importance of recognizing international science-based standards," he said. China suspended pork imports from H1N1-affected countries in the spring  of last year. Canada sold some USD 45 million worth of pork to China in 2008.

[mikey]

Pork Commentary: June Lean Hogs Surge Past 80 Cents
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
On 6 August, June lean hog prices were $65.50 on the Chicago Mercantile Exchange. 1 February this year, June was $74.65, last Friday, 26 February, June lean hogs closed at $81.40. This is an increase of about $30.00 per head since August, and about $12.00 per head in the month of February. Lean hog futures going higher is a belief by traders that pork demand is getting stronger from the lows of the summer that were at the time being hammered by H1N1 and the concern for the domestic and global economy. Couple this with the realization of 4 million fewer market hogs in the USA – Canada inventory compared to 1 January 2008 – is there any wonder lean hog futures are moving higher?

Cash hogs are also tracking higher with Iowa – Minnesota lean hog prices Friday at 69.97. This is up over $10.00 per head from the previous Friday. Higher Futures = higher lean hog prices. We need it! Two and a half years of hell is enough.

Storage
Pork in storage on 31 January this year was 495 million pounds down 110 million pounds from a year ago. This is a reflection of supply and demand. Last year, on 31 January, combined poultry, beef, and pork in cold storage was 2.210 million pounds, this year 1.8454 million pounds. This is a decline year over year of about 350 million pounds or the equivalency of 5,000 trailers of meat less in storage. (35 tons per trailer). This lower supply means the market is closer to the bone. More hand to mouth. As pork supply drops over the coming months lower cold storage levels allow for higher prices.

Feeder Pigs
In August last summer, feeder pigs were just over $10.00 each. Last week cash feeder pigs averaged $67.61(40 pound) according to the USDA. Last Friday the DTN livestock margin for market hogs indicates you can pay $71.95 for a 45 pound feeder pig (2 July – 260 pounds). A 260 pound hog on 2 July using lean hog futures equals $159.88. This is a heck of a lot better than what we have had.

Brazil
World markets affect where our own hog market is going. Last Friday we were speaking to the Genesus representative in Brazil, Martin Riordan. Martin reports that Brazil’s hog price has jumped in the last couple of weeks to 2.25 Reals per kilo or 56 cents per US pound live weight. These are the highest hog prices in Brazil since the summer of 2008. Brazilian producers like North America have lost significant money over the last 2.5 years. Brazil is a major exporter of pork with over half of its pork production exported. The surge in hog price reflects Brazil’s and the world’s supply and demand. Just as higher prices in North America support Brazil’s pork price due to export competition. It’s vice versa – higher prices in Brazil supports North America’s hog prices.

The corn harvest in Brazil has been a bumper crop. Last Friday in the south of Brazil where much of the livestock and poultry is produced corn was $146.00 per tonne or about US$3.56 per bushel. In the interior, Mato Grosso corn coul be as low as $3.00 a bushel. Brazil’s soybean harvest is just beginning but there are expectations for a bumdper crop.

Russia
We had Russian producers visit us last week. Hog prices in Russia continue to be strong with producers receiving approximately US$1.00 per pound live weight. We were told early wean pigs are fetching $85 - $90 US each. Feed prices are similar to North America. We have read reports where pork trade between USA – Russia might become easier. It doesn’t take a super pork salesman to buy pork in North America and make a profit in Russia.

Sow Prices
The sow price has surged. Sow marketing’s have dropped 15 per cent since the fall (65,000 – 55,000). At the end of last week 450 – 500 pound sows were 61.60 cents per pound up from a year ago, 49.73 cents per pound. Sows 550 pounds and up were 66.71 cents per pound last week. This is up from last year’s 55.12 cents per pound. Sows are double in price compared to last summer. A 550 pound sow can bring $370. The producer’s that kept old sows rather than selling them now have the opportunity to sell the sow and replace them with genetically improved gilts and have money left over. As market hog prices move closer to 80 cents, we believe that this will continue to support sow prices.

June lean hog prices reached over 80 cents lean. Last week cash lean hogs touched 70 cents – up $40.00 per head since August. Demand is stronger supply is dropping with 4 million fewer hogs in inventory compared to 1 June 2008. There is less pork, less beef, and less poultry in storage. Other global hog prices are increasing or staying strong. The last 2.5 years have been hell. H1N1 (swine flu) is gone and the domestic and global economies are getting stronger. In the next few months less hogs coupled with increased demand could push lean hogs to 90 cents.

GENESUS DUROC BOARS
Setting New Genetic Standards
Genesus Duroc Boars are selected from the World’s largest High Health Registered Purebred Herd. Genesus Durocs are selected for rapid growth rate, durability, feed conversion and carcass quality. Genesus Durocs are analysed using a proprietary carcass program that emphasises lean meat percentage while complementing selection for intramuscular fat, color and tenderness. All characteristics demanded by the Premium White Tablecloth and Export Markets, Genesus Duroc have been recognised for superiority with several National Genetic and Packer Carcass Awards. Our selection process is extensive.

Rapid growth – Genesus has the industry’s only dedicated Registered Purebred Duroc performance testing facility that uses computer transponders to individually measure average daily feed intake. This allows Genesus to identify High Appetite Boars that grow faster and are robust throughout production. Research has estimated that including individual feed intake measurements taken over the complete grow-finish period will increase the expected response to selection in our sire line index by 43 per cent. A key selection tool in the Genesus genetic program by our geneticists is the Sire Line Index (SLI). The SLI combines EBV (Estimated Breeding Value) for the key economic traits into one value based on their relative economic value for traits important to slaughter hogs. Last year Genesus performance tested 5.014 Durocs. Genesus has made steady, annual progress in the key economic traits.

Feed Conversion – Genesus genetic improvement programs have always included selection for feed conversion ratio (FCR). Our selection indexes have a significant amount of emphasis on FCR: 29 per cent in the Sire Line Index. In our current evaluation system an EVB for FCR is computed based on the relationships between FCR and age. Lean yield, loin eye area and percentage of lean in the loin relative to 3 primal lean. Most experts agree that feed intake is strongly related to growth rate and fatness. A 1993 study determined that one day less to 220 lb resulted in 1.96 lb less feed and for every .04 inches less fat at 220 lb resulted in 2.34 lb less feed from 55 to 220 lb growth period.

Use of Carcass and Meat Quality Data
Carcass and meat quality data is combined with off-test data (growth and ultrasound), pedigree data and off-test, carcass and meat quality data on sibs and relatives for genetic evaluation. Currently Estimated Breeding Values are computed on a weekly basis for the following carcass and meat quality traits:

Loin depth
Loin depth
Fat depth
Loin marbling score
Loin eye area
Loin pH
Lean yield
Loin Minolta L reflectance
This data collection has enabled Genesus geneticists to accelerate superior carcass quality traits. Packers recognise Genesus Durocs Quality and Uniformity and this leads to our customers having hogs with market options and demand.

Structure – Over the last decade tens of thousands of Genesus Durocs have been tested annually on cement slats in a real life environment. The ability for Genesus Durocs to breed and produce offspring that perform in commercial facilities is well recognised in our industry and by our customers.

Health– All Genesus Duroc boars come from our Primary Nucleus Units. Genesus Duroc Boars health meets and exceeds industry standards. Our seven dedicated AI centers have excellent health and biosecurity.

Registered Purebred Durocs – Many genetic companies sell what they call Durocs. Genesus sells only Registered Purebred Durocs from 100 per cent registered purebred herds. Genesus currently has the world’s largest Registered Purebred Herd. Last year Genesus registered 41 per cent of all Purebred Breeding Stock in the nation. You can be confident you are getting a 100 per cent Duroc boar with Genesus, verifiable by the official National Purebred Swine Registry.

Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Pork Commentary: June Lean Hogs Surge Past 80 Cents
CANADA - This week's North American Pork Commentary from Jim Long.


Jim Long is President &
CEO of Genesus Genetics.
On 6 August, June lean hog prices were $65.50 on the Chicago Mercantile Exchange. 1 February this year, June was $74.65, last Friday, 26 February, June lean hogs closed at $81.40. This is an increase of about $30.00 per head since August, and about $12.00 per head in the month of February. Lean hog futures going higher is a belief by traders that pork demand is getting stronger from the lows of the summer that were at the time being hammered by H1N1 and the concern for the domestic and global economy. Couple this with the realization of 4 million fewer market hogs in the USA – Canada inventory compared to 1 January 2008 – is there any wonder lean hog futures are moving higher?

Cash hogs are also tracking higher with Iowa – Minnesota lean hog prices Friday at 69.97. This is up over $10.00 per head from the previous Friday. Higher Futures = higher lean hog prices. We need it! Two and a half years of hell is enough.

Storage
Pork in storage on 31 January this year was 495 million pounds down 110 million pounds from a year ago. This is a reflection of supply and demand. Last year, on 31 January, combined poultry, beef, and pork in cold storage was 2.210 million pounds, this year 1.8454 million pounds. This is a decline year over year of about 350 million pounds or the equivalency of 5,000 trailers of meat less in storage. (35 tons per trailer). This lower supply means the market is closer to the bone. More hand to mouth. As pork supply drops over the coming months lower cold storage levels allow for higher prices.

Feeder Pigs
In August last summer, feeder pigs were just over $10.00 each. Last week cash feeder pigs averaged $67.61(40 pound) according to the USDA. Last Friday the DTN livestock margin for market hogs indicates you can pay $71.95 for a 45 pound feeder pig (2 July – 260 pounds). A 260 pound hog on 2 July using lean hog futures equals $159.88. This is a heck of a lot better than what we have had.

Brazil
World markets affect where our own hog market is going. Last Friday we were speaking to the Genesus representative in Brazil, Martin Riordan. Martin reports that Brazil’s hog price has jumped in the last couple of weeks to 2.25 Reals per kilo or 56 cents per US pound live weight. These are the highest hog prices in Brazil since the summer of 2008. Brazilian producers like North America have lost significant money over the last 2.5 years. Brazil is a major exporter of pork with over half of its pork production exported. The surge in hog price reflects Brazil’s and the world’s supply and demand. Just as higher prices in North America support Brazil’s pork price due to export competition. It’s vice versa – higher prices in Brazil supports North America’s hog prices.

The corn harvest in Brazil has been a bumper crop. Last Friday in the south of Brazil where much of the livestock and poultry is produced corn was $146.00 per tonne or about US$3.56 per bushel. In the interior, Mato Grosso corn coul be as low as $3.00 a bushel. Brazil’s soybean harvest is just beginning but there are expectations for a bumdper crop.

Russia
We had Russian producers visit us last week. Hog prices in Russia continue to be strong with producers receiving approximately US$1.00 per pound live weight. We were told early wean pigs are fetching $85 - $90 US each. Feed prices are similar to North America. We have read reports where pork trade between USA – Russia might become easier. It doesn’t take a super pork salesman to buy pork in North America and make a profit in Russia.

Sow Prices
The sow price has surged. Sow marketing’s have dropped 15 per cent since the fall (65,000 – 55,000). At the end of last week 450 – 500 pound sows were 61.60 cents per pound up from a year ago, 49.73 cents per pound. Sows 550 pounds and up were 66.71 cents per pound last week. This is up from last year’s 55.12 cents per pound. Sows are double in price compared to last summer. A 550 pound sow can bring $370. The producer’s that kept old sows rather than selling them now have the opportunity to sell the sow and replace them with genetically improved gilts and have money left over. As market hog prices move closer to 80 cents, we believe that this will continue to support sow prices.

June lean hog prices reached over 80 cents lean. Last week cash lean hogs touched 70 cents – up $40.00 per head since August. Demand is stronger supply is dropping with 4 million fewer hogs in inventory compared to 1 June 2008. There is less pork, less beef, and less poultry in storage. Other global hog prices are increasing or staying strong. The last 2.5 years have been hell. H1N1 (swine flu) is gone and the domestic and global economies are getting stronger. In the next few months less hogs coupled with increased demand could push lean hogs to 90 cents.

GENESUS DUROC BOARS
Setting New Genetic Standards
Genesus Duroc Boars are selected from the World’s largest High Health Registered Purebred Herd. Genesus Durocs are selected for rapid growth rate, durability, feed conversion and carcass quality. Genesus Durocs are analysed using a proprietary carcass program that emphasises lean meat percentage while complementing selection for intramuscular fat, color and tenderness. All characteristics demanded by the Premium White Tablecloth and Export Markets, Genesus Duroc have been recognised for superiority with several National Genetic and Packer Carcass Awards. Our selection process is extensive.

Rapid growth – Genesus has the industry’s only dedicated Registered Purebred Duroc performance testing facility that uses computer transponders to individually measure average daily feed intake. This allows Genesus to identify High Appetite Boars that grow faster and are robust throughout production. Research has estimated that including individual feed intake measurements taken over the complete grow-finish period will increase the expected response to selection in our sire line index by 43 per cent. A key selection tool in the Genesus genetic program by our geneticists is the Sire Line Index (SLI). The SLI combines EBV (Estimated Breeding Value) for the key economic traits into one value based on their relative economic value for traits important to slaughter hogs. Last year Genesus performance tested 5.014 Durocs. Genesus has made steady, annual progress in the key economic traits.

Feed Conversion – Genesus genetic improvement programs have always included selection for feed conversion ratio (FCR). Our selection indexes have a significant amount of emphasis on FCR: 29 per cent in the Sire Line Index. In our current evaluation system an EVB for FCR is computed based on the relationships between FCR and age. Lean yield, loin eye area and percentage of lean in the loin relative to 3 primal lean. Most experts agree that feed intake is strongly related to growth rate and fatness. A 1993 study determined that one day less to 220 lb resulted in 1.96 lb less feed and for every .04 inches less fat at 220 lb resulted in 2.34 lb less feed from 55 to 220 lb growth period.

Use of Carcass and Meat Quality Data
Carcass and meat quality data is combined with off-test data (growth and ultrasound), pedigree data and off-test, carcass and meat quality data on sibs and relatives for genetic evaluation. Currently Estimated Breeding Values are computed on a weekly basis for the following carcass and meat quality traits:

Loin depth
Loin depth
Fat depth
Loin marbling score
Loin eye area
Loin pH
Lean yield
Loin Minolta L reflectance
This data collection has enabled Genesus geneticists to accelerate superior carcass quality traits. Packers recognise Genesus Durocs Quality and Uniformity and this leads to our customers having hogs with market options and demand.

Structure – Over the last decade tens of thousands of Genesus Durocs have been tested annually on cement slats in a real life environment. The ability for Genesus Durocs to breed and produce offspring that perform in commercial facilities is well recognised in our industry and by our customers.

Health– All Genesus Duroc boars come from our Primary Nucleus Units. Genesus Duroc Boars health meets and exceeds industry standards. Our seven dedicated AI centers have excellent health and biosecurity.

Registered Purebred Durocs – Many genetic companies sell what they call Durocs. Genesus sells only Registered Purebred Durocs from 100 per cent registered purebred herds. Genesus currently has the world’s largest Registered Purebred Herd. Last year Genesus registered 41 per cent of all Purebred Breeding Stock in the nation. You can be confident you are getting a 100 per cent Duroc boar with Genesus, verifiable by the official National Purebred Swine Registry.

 


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Pork Commentary: Cash Hog Prices Continue to Surge
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
Last Friday, Iowa – Minnesota’s lean hog price was $72.23 per pound, up $2.25 from the week before. Prices are definitely moving higher with June lean hog futures setting new life of contract highs last week before settling Friday at $81.95. Hogs a year ago now were $59 the $13 a hundred weight difference (compared to $72) amounts to about $26 per head greater revenue. It’s not a miracle but it definitely is a significant price gain year over year. This price difference year over year is being accomplished by better demand for pork and less hog supply coming to market each week. Last week US hog marketing’s were 2.168 million head, down 57,000 head compared to a year ago. In our opinion the $26.00 per head improvement in prices year over year is mostly from increased pork demand domestically and globally. Though hog numbers are down 3 per cent from a year ago this would not change prices $26.00 per head. It is pork demand. The US and global economies are improving, while pork supply has decreased in some countries which has increased US exports year over year.

H1N1 (swine flu) did not hit until the end of April last year. Current year over year prices and demand were not affected by this factor. As we move into May and the summer months, the pork demand factor will be startling this year compared to the year before. No H1N1, a stronger domestic and global economy. “Hang on Cowboys, this market is going for a wild ride!”

Supply
4 million fewer hogs in inventory on 1 January (USA – Canada) compared to January 1st 2008. That’s 4 million empty nursery and finishing spaces. This is equivalent to 4,000 – 1,000 head barns. Is it any wonder the USDA calculated cash sews are $15.21 average while USDA cash 40 pound feeder pigs are averaging $71.60. There are lots of empty spaces chasing fewer pigs. We keep hearing that there is no cash left in our business and credit is tight, the reality is $71.60 cash feeder pigs means there is still enough cash and/or credit to push prices higher. 40 pound cash feeder pigs at $71.60 means that there are lots of optimistic buyers willing to risk their capital.

Demand
Last summer we were at the Lake of the Ozarks conference. Speaker after speaker doomsayers talked about the need to cut supply. We were baffled and dismayed that our industry appeared to be totally focused on cutting supply as the panacea to correct the financial picture. Of course markets are supply but they are also demand. The speakers only seemed to be able to focus on one side of the supply – demand equation. H1N1 was raging in the media, the only solution the speakers had was to cut our industry 500,000 more sows. It was simplistic and an unrealistic proposed solution. They missed what better demand could do. Get H1N1 (swine flu) out of the media and in a couple of months consumers forgot it ever existed. Get the US and Canada GDP jumping 5 per cent in a quarter (as it has) and the next thing you see is increased domestic pork demand. Get the global economy improving and pork exports will increase (December up 14 per cent). It’s both supply and demand. Indeed we have cut supply – the 4 million fewer pigs in inventory USA – Canada January 1st compared to January 1st 2008 is a stark downsizing of supply. The reality is the downsized production base that cut inventory 4 million head was already in place when the speaker spoke at the Lake of the Ozarks. What they were proposing was to cut production by 9 – 10 million more hogs a year? It was over the top and unrealistic. All we would have done is forever handed a greater proportion of meat consumption to poultry as they rushed to fill the hole.

It concerns us that our perceived industry leadership when the going got tough, could only retreat. If they were in charge at Valley Forge they would have surrendered, they would never have crossed Delaware. There would be no United States today. AS an industry we have to grow demand, you do that by selling and promoting. You don’t get it done by acting like a victim.

Pork has 44 per cent of the Global Meat Consumption. It is the Number 1 meat by a large amount. People buy pork because they want to. They are voting with their money. USA – Canada have a quality pork product - producers with expertise and productivity. A globally competitive cost of production. Packers with capital, expertise and scale. This is a powerful combination.

Lean Hog Futures continue to increase. Supply is definitely down and pork demand is up. The doomsayer speakers were wrong this past summer. They forgot to calculate increased demand. It is here and we will all benefit. In the end, producers had more faith in the industry than the expert speakers. They will be rewarded!


Author: Jim Long, President & CEO, Genesus Genetics