Canadian Pork Producers:

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Manitoba Live Hog Shipping Patterns Adjust
CANADA - The Manitoba Pork Marketing Co-op says patterns of live hog movement within the province have changed dramatically over the past 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. 
In June of last year, in response to the shift in hog slaughter capacity from Winnipeg to Brandon, the Manitoba Pork Marketing Co-op closed its central assembly yard in Winnipeg opting instead for a series assembly points, including its existing yard at Neepawa and a new staging point at New Bothwell.

Earlier this month the co-op opened its third assembly yard at the corner of the Perimeter Highway and Provincial Highway Number Six at Winnipeg Livestock.

Co-op CEO Perry Mohr says, since the closure of the central yard, shipping patterns have changed substantially.

Perry Mohr-Manitoba Pork Marketing
We worked with the trucking companies, we've worked with the colonies that have bought their own trucks and they largely now ship full potloads of 200.

Our receiving yards are situated so that, if they have more than the 200 or they have more than two full loads or not quite two full loads, that our assembly yards are there to accommodate the extra hogs that they have that aren't quite in full load volumes and that's worked out quote well.

Especially at the Winnipeg Livestock facility, we've seen some of that happen.

In terms of our total volume I would suggest that at New Bothwell we're handling about one thousand a week, we're hoping to get up to that number at the Winnipeg Livestock facility as well, and at Neepawa right now we're handling probably 200 or 300 a week for Manitoba Pork and probably another just about 20 thousand for Springhill.

Mr Mohr notes, with the introduction of US Country of Origin Labelling, the volume of hogs moving into the United States has dropped dramatically.

He says, while some hogs are still moving south, the majority of the bacon hogs are flowing into the western part of the province.

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Pork Commentary: The Swine Market is Bad
CANADA - This week's North American Pork Commentary from Jim Long.
Every week we look for positive things to give us hope that the financial losses we have been experiencing are coming to an end soon. It’s a challenge. It is the proverbial "Little boy looking for the Pony in the Manure Pile". Optimistic but hammered by the everyday reality of gushing financial losses.

We hear stories daily of producers giving up – either running out of cash (capital), or desire (courage). The attrition is daunting. There is no easy exit strategy. Good sow units are being offered for sale at less than $500 per sow when you take off land value. We are in an industry where not only have there been cash losses of $5 billion over the last 2 years, but we face an infrastructure market value loss of almost equal amounts. The truth is we are all marooned. We stay and fight or we exit with nothing but our memories of what was once a good business. There are few options.

Pork powerhouses
Last week successful farming released its annual list of pork powerhouses. It showed a marked decrease. The top 25 US powerhouses have dropped year over year 200,899 sows. In Canada the 5 largest two years ago had 280,395. The same 5 companies in 2009 had decreased to 153,000. One of the five two years ago Stomp Farms had 40,000, now they are out of business.

The grim reality of the huge financial losses that our industry has encountered has not missed the powerhouses. There has been no silver bullet. From what we understand there are further reductions at some of the larger systems. The ability to maintain cash flow is a challenge for us all. Week upon week of $30 per head losses is draining $70 million a week from our industry. It’s not hard to do the arithmetic. The number of sows of each powerhouse and how many hogs they should produce to come up with how bad this is.

US Pork Powerhouse 2009 Company Headquarters   
2009 2009 2008
1 Smithfield Foods/Smithmold,VA. 922,251 1,020,000
2 Triumph Foods/St. Joseph, MO. 371,500 396,000
3 Seaboard Foods/Shawnee Mission,KS. 213,800 213,800
4 Iowa Select Farms/Iowa Falls,IA. 152,900 160,000
5 The Pipestone System/Pipestone, MN. 132,000 143,600
6 The Maschhoffs/Calyle, IL. 130,000 130,000
7 Prostage Farms/Clinton, NC. 125,000 140,000
8 Cargill/Minneapolis, MN 116,000 116,000
9 The Carthage System/Carthage, IL. 85,000 90,250
10 AVMC Management Services/Audubon,IA 77,000 82,000
11 Maxwell Foods/Goldsboro, NC. 69,000 73,000
12 Hormel Foods/Austin, MN. 54,000 54,000
13 Progressive Swine Technology/Columbus, NE 53,200 55,200
14 Tyson Foods/Springdale, AR. 52,000 70,000
15 Country View Family Farms/Hathold, PA. 46,500 43,700
16 Nebraska Pork Partnors/Columbus, NE. 44,500 50,000
17 Wakefield Pork/Gaylord, MN. 40,500 41,000
18 Holden Farms/Northfield, MN. 40,000 40,000
19 Texas Farm/Perryton, TX 40,000 39,000
20 TriOak Foods/Oakville, IA. 35,000 35,000
21 Schwartz Farms/Sleepy Eye, MN. 30,000 30,000
22 Coharlo Farms/Clinton, NC. 29,000 31,700
23 M2P2/Aimes, IA. 27,500 30,000
24 Swine Graphica Enterprises/Webster City, IA. 24,100 24,100
25 Coastal Plains Pork/Murrells, NC. 24,000 27,000
TOTAL Loans of 200,899 sows 2,934,251 3,135,150
2009 Western Canada Pork Powerhouses 2009 2008
1 Hytek, LaBroquerie, MB 58,000 60,000
2 Big Sky Farms, Humboldt, SK 42,000 47,800
3 Maple Leaf Agri - Farms, Landmark, MB 35,000 44,000
4 The Puratone Corporation, Niverville, MB 28,000 40,000
5 Sunterra Farms, LeRoy, SK. 13,000 13,000
TOTAL Loans of 28,800 sows 176,000 204,800

230,000 fewer sows - Canada – USA in the pork powerhouses year over year will definitely decrease future hog supply.

Pork Farm to Retail
USA Pork farm to retail price spread was $2.302 pounds, in August 2008 it was $1.939 pounds. Thank you very much Mr. Retailer for filling your pockets while farmers are losing their farms. Someone asked us last week why are retailers taking such a margin? Our answer: "Because they can." The one positive is pork is moving and not being put in storage despite retail pork prices that are far from discounted. This indicates descent retail demand. As pork supply diminishes, this should be positive for hog prices.

Feeder Pigs and Early Weans
The cash prices for early weans and feeder pigs have come off the floor last week. They increased, according to the USDA report $4 - $7 each. Seasonality is working in favor of continued price appreciation. We expect cash early – weans to exceed $30 within four weeks. Lower feed prices, stronger lean hog futures and the reality of more finisher barns then there are pigs all play into price appreciation.

Canada
Cull sow shipments to the USA from Canada since the first of July are 37,000 higher than a year ago. This is a reflection of liquidation ongoing in Canada.


Small pig shipments from Canada the last 8 weeks have averaged 90,000 per week. The week of 22 August at 85,000 was the smallest week since the winter of 2003. In 2008, Canada averaged 141,000 per week the decline to 90,000 the last weeks is a result of liquidation and some pigs staying in Canada. The end result is there are fewer pigs for US finisher barns and packers. These numbers are fortunately quite accurate as they are based on USA government import numbers. Fewer pigs will be price enhancing.
Summary
This coming week we will be visiting Mexico and attending the Mexican Pork Exposition. We will give a report next week.
This Friday the USDA will release the 1 September Hogs and Pigs Report. Let’s hope it shows significant herd liquidation.

Author: Jim Long, President & CEO, Genesus Genetics 

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Positive Aspects of Pork Production to be Highlighted
CANADA - Winnipeg-based Finer Feeds is encouraging a greater awareness of the positive aspects of swine production in western Canada, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
On Friday Finer Feeds will host a public meeting in Rosetown, Saskatchewan to draw attention to some of the positive developments that have been happening within the swine industry.

Among the topics will be tips for reducing heating and ventilation costs, avoiding waste in applying vitamins and minerals to feed and updates on government programs and market trends.

Finer Feeds livestock consultant Darryl Olson says maintaining a positive attitude relieves pressure and encourages better decision making.

Darryl Olson-Finer Feeds
There's always too sides to things and right now everyone's been stressing the negative.

We have a local paper come out of Saskatoon and you very seldom read anything positive.

I think it's our job, it's our right our and our duty and our privilege to show the positive aspects of what's going on.

The hog farmer, the beef producer gets a bill each month for his feed and he sees his losses each month and I think we have to show them encouragement.

There is light at the end of the tunnel, that there is a culling process going on, that we will see an improvement and encourage our producers to think wisely, to manage properly and they'll come out ahead.

It's a culling process for producers as well as for the hog industry so we have to be able to stand behind these guys.

As a feed company we've tried to come up with less expensive feeds, better ways to feed the animals, educate and this is why we're having this meeting.

Mr Olson encourages the media to take a more positive approach to agriculture so that everyone isn't dragged down.

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The Biggest Challenge for Prairie Farmers
CANADA - To improve water quality in Lake Winnipeg Prairie farmers are being urged to balance crop nutrient applications with crop removal and to avoid winter application, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Research conducted in Manitoba's South Tobacco Creek watershed shows about 80 per cent of phosphorus loading and runoff occurs during spring snowmelt.

Although phosphorus contained in eroded soil is a concern in many regions the main challenge for prairie farmers is dissolved phosphorus in runoff.

National Centre for Livestock and the Environment chair Dr. Don Flaten notes, although the concentration of phosphorus in runoff may not differ all that much, much of the runoff from summer rains soak into the soil but snowmelt is different because it occurs when the soil is frozen.

Dr. Don Flaten-Univesity of Manitoba
In other parts of North America they really promote conservation tillage because they've got a big problem with erosion of soil particles being the main form of phosphorus loss.

In our environment we're not wet enough or we don't have steep enough slopes to really make erosion our big problem and we've got this dissolved phosphorus problem.

It's going to take more than erosion control to really solve our problem so what we're really promoting is making sure that you try to balance phosphorus addition at a rate that doesn't exceed crop removal so you don't build up excess phosphorus levels in your soil and avoiding winter application. But I don't mean that that's a simple challenge to address.

There are big challenges in areas where there is a very high livestock density.

There may not be sufficient land base for everybody to go on sort of a phosphorus balance based system.

Also for some small producers the storage costs for avoiding winter spreading of manure can be quite high and so we have some substantial technical and economic challenges that are built in within those two overall recommendations.

Dr. Flaten says our high proportion of dissolved phosphorus is difficult to intercept once it starts moving off the field, so we need to be careful about when and how much phosphorus is applied in the first place.

 

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Study: Supply Management Not a Simple Solution
ONTARIO, CANADA - A recent study prepared by The University of Guelph, Ridgetown Campus, finds that implementing a supply management system for Ontario’s hog industry would be a challenge.

Information provided courtesy Ontario Pork

 

Commissioned by Ontario Pork, the study suggests that the Ontario industry would need to shrink anywhere from 43 – 58 per cent and overcome significant hurdles including international trade issues and development of a tariff system; reduction in production to meet domestic consumption; production allocation among provinces and whether a quota system would be used to set production volumes.

Supply management attempts to match domestic production with estimated domestic consumption. It would also have to be national in scope and have the support of all provinces with a stake in it. Author of the study, College Professor and Research Co-ordinator, Ken McEwan says: "The movement to a supply management system would involve considerable downsizing of the existing Canadian swine herd. The implications of this downsizing to industry business partners would be far-reaching and in some cases could mean closure."

"This topic has been brought up several times over the years," said Chair Wilma Jeffray. "With pork producers looking for alternatives and options in this depressed market, Ontario Pork felt it was time to investigate the supply management concept and its feasibility. From the numbers presented I think there is clear evidence that Ontario’s hog sector would be severely impacted by adopting this system."

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Canadian Standard for Pork Quality Recommended
CANADA - Participants in a Canadian pork industry trade mission that traveled to Japan are endorsing the creation of a Canadian pork industry standard aimed specifically at satisfying the demands of that market, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Representatives of Canada Pork International, the Canadian Pork Council and pork councils across Canada returned earlier this month from a trade mission to China, Hong Kong and Japan.

The main focus of the trip was learn more about the premium Japanese market and what buyers there are looking for.

Manitoba Pork Council sustainable development manager Mike Teillet says, while Canadian pork tends to be preferred over other imported pork, Japanese buyers are very discriminating.

Mike Teillet-Manitoba Pork Council
They look for colour, for example they want white fat.

This is what we were told.

They prefer the white fat over the yellow fat.

They want a consistency in size.

They also tend to cut their pork very thinly compared to what we do and that means that they want a very firm texture in their pork so that it cuts thinly without flaking.

There was also some mention of bone chips.

They were concerned about that and they want to ensure that quality stays high.

They felt that, to some extent, the quality coming from all imported pork tended to be inconsistent.

They notice when our quality drops so we have to make sure that we keep our quality level up.

A couple of things that we have talked about were developing a Canadian standard.

Right now we don't really have one for pork, but a series of measurements or quality attributes that would deal with marbling and colour or size, firmness, texture and that sort of thing.

Mr Teillet believes that would be helpful in Japan because the Japanese are so discriminating and he believes there is an opportunity to create a premium niche market in Japan for Canadian pork.

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Hypor Lands in Viet Nam
VIET NAM - Hypor, the pig breeding division of Hendrix Genetics, announced today that their first delivery of GGPs/GPs to Viet Nam arrived on 30 August.

 



Photo (L-R): Geert Rutten, Business Development/Regional Manager Hypor International; Dr. Evaristo Macalino Area Manager Hypor Asia (excluding China) and Mr. Nguten Quoc Trung, General Director, Japfa Comfeed Vietnam Ltd.Japfa Comfeed Vietnam Ltd, a division of well established and successful agriculture integrator PT Japfa Comfeed Indonesia Tbk, accepted delivery of the Canadian produced breeding stock for their new pork production business venture.

The arrival of the Hypor genetics highlights the commitment of Japfa Comfeed Vietnam Ltd. to develop a supply of quality pork products for the growing local market.

Raf Beeren, Deputy Managing Director Hypor sees the introduction of Hypor Genetics into the Vietnamese market as a natural progression of market share growth in Asia. "Building on our experiences in Japan, The Philippines, South Korea, Thailand and China, we have a long history for developing partnerships with successful integrators in this region and Japfa Comfeed has an equally distinguished record in animal feed manufacturing, chicken breeding, poultry processing and aquaculture farming throughout the region," said Beeren.

Viet Nam’s agriculture sector and specifically its pork production targets are most ambitious with analysts predicting more than a 40 per cent increase in production in the next 3 three years. The country currently has the world’s fourth largest sow population. Acknowledged success in Asian markets and its unique BioHypor closed herd breeding program were key factors in Japfa Comfeed’s decision to purchase Hypor high health genetics for the initial phase of their integration project.

Dr. Kuswanto, Senior Vice President, Japfa Comfeed Vietnam Ltd. sees unlimited opportunities for both Hypor and Japfa in this market. He is targeting one million tons of annual feed production for the project by 2015. "Given the performance of Hypor genetics, their BioHypor breeding program and their technical support team and our track record as an efficient, high quality, low cost organization we can meet this ambitious goal," said Dr. Kuswanto.

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Monday, September 28, 2009Print This Page
Optimism within Western Canadian Swine Industry
CANADA - A livestock feed consultant with Winnipeg based Finer Feeds reports optimism is growing within western Canada's swine industry as producers start to see light at the end of the tunnel, writes Bruce Cochrane.

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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Canadian pork producers have faced over three years of losses due to factors which have included an over-supply of live hogs, high feed costs, the strong value of the Canadian dollar and the global economic situation.

On Friday pork producers gathered in Rosetown, Saskatchewan to examine some of the positive aspects of pork production.

Meeting organizer Daryl Olson notes the agriculture minister from the Russian Federation will visit Saskatchewan in November to talk about importing more Canadian pork into Russia, there's a cull program planned for Canada and US producers are being encouraged to reduce their production.

Daryl Olson-Finer Feeds
Optimism is growing.

They can see that there's going to be an upswing.

History has shown that there's always a pendulum effect, that we'll have a down-turn and then it'll have a gradual up-turn.

I think through the talks that we had that that was brought out to everybody and it showed that there is light at the end of the tunnel.

We can see probably not in the next quarter or two but probably in the first quarter of next year that there will be, I believe, a price increase.

With the soy markets going down, the corn going down the producers are able to buy feed at less cost.

Also what it has done is, through these tough times, the producer has had to look at how to make their operations lean.

This happened in the grain industry.

Everyone had to go look at their operations and find a more efficient way.

Now, when the prices go up in the hog industry, they can still have these lean practices and make more money.

Mr Olson says Canada produces the best pork in the world and he suggests producers and processors need to work together with government to promote that product.

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Pork Commentary: Light at the End of the Tunnel
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
The USDA released the September Hogs and Pigs Report last Friday. Since the first of June the USDA data indicates a large decrease in breeding stock of 93,000 (we predicted 100,000) which is just over 7,000 a week. Since the 1st of September 2007 or since we have had financial losses (2 years). The US breeding herd has declined 334,000. Some pundits have said, ‘there has been little liquidation’, we believe is somewhat misleading. We believe the US liquidation is continuing and expect at least 70,000 more sows leaving net production by 1 December.

The cool weather this summer appears to have helped litter size with a 9.70 June – August average – up from last year’s 9.51. Productivity increases are helping lower the cost of productions but at the same time keep putting more hogs on the market. The productivity increases are interesting but with a 50 per cent sow utilization in the quarter which works out to 2 litter’s per breeding animal per year. Let’s do some arithmetic: 2 litters x 9.70 pigs per litter = 19.4. That is not exactly 25 is it? Still there is lots of room for improvement.


The US market hog inventory year over year decrease is just under 1.4 million hogs.
September USDA Market
2008 62,135
2009 60,752

The continual decrease in the breeding herd and fewer small pigs from Canada are having an effect. The 1.4 million head quarterly decline is the largest year over year since 2003. We expect when Canada’s quarterly inventory report is released the combined USA – Canada Market Inventory will hit the 2.3 million plus decrease we projected a couple of weeks ago.

The largest decline in market inventory is in under 60 lb category – down almost 800,000 – expect this to support January on prices.


The Canada – USA breeding inventory reached its peak 2 years before our financial losses began at 7.752 million sows. We expect the combined September Canada – USA breeding inventory will be approximately 7.220 million. If correct, a drop of 530,000 sows in the last two years. Not much if you say it fast, but certainly a sad testament of our industry’s inability to maintain pork demand in the face of higher feed prices. Every sow gone has a story. Lost dreams and lost money.
Summary
The USDA hogs and pigs report confirms liquidation. We expect the breeding herd will continue to liquidate as more producers run out of capital and/or courage. The Market Inventory is lower but productivity increases through helping costs of productions are continuing to have a large impact on enhancing pork supply and holding hog prices down.

Probably the biggest hurdle we have to get stronger prices is H1N1 (unfortunately referred to as swine flu). The fear of death caused by this flu continues to be hammered out there by the media and health officials. We expect in the end it will be a toot in a windstorm (other than the billions it’s cost our industry). We need to get through the next 90 days with no pandemic and no body bags being used. The media is obsessed that fall – winter will magnify the flu impact. We need to teach these village idiots some geography – the Southern hemisphere already had winter and H1N1. No pandemic, no vaccine either. Y2K everyone! Much about nothing. H1N1 manufactured crisis by the media and the drug industry.

We expect to see relative hog price enhancement as soon a H1N1 becomes a non factor and the term swine flu and dead people drops out of the mass media. Domestic and global demand will then pick up. There has been liquidation and there still is liquidation. Fewer pigs and a recovery out of the extraordinary negative atmosphere that pork has been put under will push prices to profitability. When this happens, is the billion dollar question but we expect breakeven by early 2010.

Mexico
Last week we attended the Mexican National Pork Congress and inaugurated the new 2400 sow Genesus multiplier in central Mexico. Our observations:

Lots of people read this commentary in Mexico which is translated weekly into Spanish on Porcicultura.com.


We had a number of Mexican producers tell us we were wrong when a couple of weeks ago we wrote that Mexican prices of 19.5 pesos per kilogram (65 cents US live weight per pound)was profitable. Many told us high feed prices over $300 a tonne were putting their cost of productions over 65 cents – we stand corrected.


Two years ago it is estimated that the Mexican sow herd was approximately 1 million sows (there are no official statistics). Today we are told the Mexican sow herd is between 600 – 700,000 sows, a drop of 300 – 400,000 over the last two years. High feed prices ($300 a tonne), hog prices below the cost of production and the impact of H1N1 has hammered the industry.


We have done business in Mexico for twenty years. Historically the Central Mexico hog prices are about 10 – 12 cents US live weight per pound higher than the US market. Today it’s the highest spread in history, 25 – 30 cents a pound. A reflection of the huge decrease of live hogs available in Mexico. The price spread is despite the H1N1 fear by Mexican consumers. As consumer confidence returns we expect higher prices.


Pig Champ data for Mexico indicates a pigs weaned per sow of 18.3. Adaption and utilization of technology including enhanced genetics would go a long way to lower costs of production. In a financial crisis there are watershed moments when people adjust and make moves for now and the future. Some things that were good enough before aren’t anymore. It’s Darwian Genetics. In Mexico or Canada or the USA – Adapt or die, brutal but unfortunately true.


Mexico is lower 300,000 – 400,000 sows; Canada – USA. is a decrease of 500,000 plus in the last two years. We expect by December 1st the USA – Canada – Mexican breeding herd will be down about one million sows. The population of the three countries is 430 million people and growing over 1 per cent per year. It is a continental market; lower pork supply in Mexico will lead to increased pork imports. Less hogs and increased demand from domestic and international consumers will pull prices higher as soon as H1N1 dies. There is still a hog cycle. At some point, we know the survivors will be rewarded. The challenge is living for the day when more cash comes in, than goes out.

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Pork Industry Needs to Reduce Reliance on US
CANADA - The Saskatchewan Pork Development Board suggests to flourish Canada's swine industry needs to reduce its reliance on the United States, 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. 
Losses within the Canadian pork industry have continued for about three years.

Sask Pork Chair Joe Kleinsasser, on hand for a meeting of pork producers Friday in Rosetown, suggests, while pork producers in most of the rest of the world have recovered, the North American industry continues to struggle.

Joe Kleinsasser-Saskatchewan Pork Development Board
Number one, we have to get a price in Canada.

We have to get a "Made in Canada" price for our pigs.

Our pigs right now are going off a price which is the American spot price and only 17 per cent of the pigs killed in the states are killed on that price.

The rest are in contracts.

It's almost an insult to our producers to take a price that is only based on 17 per cent of the kill.

That is one of the things that I think this industry needs to do.

The other one is we need to cut our reliance on the Americans.

When you look at what's happened around the world, all the countries that were suffering, went through bad times, down-sized their industry and are now doing very well.

Great Britain is making money, Australia is doing very well.

These are industries that went through maybe a year and a half of turmoil have turned around.

We have gone through almost three years because we started out when the rest of the countries did in losing money.

Even though we cut our herd, it didn't matter because we're joined at the navel with the Americans who lagged a year and a half behind the rest of the world in terms of hurt in their industry so they're still adjusting to that and because we're tied to them we still haven't reaped the benefit of a turn-around.

So we need to reduce our reliance on the Americans.

Mr Kleinsasser notes the Canadian breeding herd has been reduced by 12 percent and further cuts are planned the but Americans have not followed suit.

 

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Further Cuts Needed to Drive Up Hog Prices
CANADA - A Des Moines, Iowa-based agricultural economist says further reductions will be needed in the North American breeding herd to push up hog prices and restore profitability, 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. 
In August pork producers in the United States lost an estimated 40 dollars per hog and because of factors such as the rising value of the Canadian dollar the hurt has been greater on the Canadian side of the border.

Paragon Economics president Dr Steve Meyer says the losses have been fueled primarily by a 20 per cent rise in input costs so producers will have to reduce output to drive up hog prices enough to cover those costs.

Dr Steve Meyer Paragon Economics
We've seen reductions on both sides of the border and there have been substantial reductions both places.

The United States has a larger herd so our reductions so far since our peak back in December of 2007 has been about 359 thousand head on the breeding herd or 5.7 per cent or so.

On Canada, of course, a much smaller herd so their reduction of 250 thousand head roughly since their peak back in 2005 has been about a 15 per cent reduction.

When we look at that the argument can certainly be made that the United States needs to cut back more.

I think the truth is that both countries are going cut back some more.

I think Canada is headed for 1.2 to 1.25 million sows and that would be another 100 to 150 thousand there.

The US is probably going to take out another 300 thousand sows to get down close to 5.5 million.

At that rate, with the productivity gains we've seen, we'll probably supplies in late 2010-2011 and beyond, we can get them back down where we can generate the kind of prices that we need to cover these higher costs.

Dr Meyer predicts, based on US futures prices, that we could see four or five profitable months next year.

He says that suggests, if these reductions are made over the winter and into the spring, that by 2011 we should see this thing turn around and be back in the black for most producers.

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Pork Producers Call on Manitoba Govt for Assistance
CANADA - Manitoba Pork Council is urging the Manitoba government to follow the lead of other provinces and provide much needed financial support for the province's pork producers, 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 three years Canadian pork producers have been financially devastated by a combination of factors.

Manitoba Pork council chair Karl Kynoch says while Alberta, Saskatchewan and Ontario have all come to the table with support programs, requests as far back as April to the Manitoba government for action have gone unanswered.

Karl Kynoch-Manitoba Pork Council
The other province's have come forward and helped the producers with some cash flow to be able to pay their bills.

Basically by our province not coming to the table that has basically put us on an unlevel playing field so our producers here will be hurting a little deeper than a lot of the other provinces just due to the fact that we haven't had assistance.

I know one of the things that a lot of people are always concerned about is the trade action risk when you do put some cash into the markets but we've got to remember that our producers right now are fighting for survival.

Over the last year and a half we've really reduced the number of hogs that have been going south into the US.

Our producers have been responding to market conditions.

They've been lowering the sow herd here in Canada and that so we feel that trade risk is very low because we've been responding to market conditions.

The thing is getting a little bit of cash into producers pockets will go a long way to help them carry on to getting back to profitable times, being able to pay up a lot of their local feed bills.

There's a lot of feed companies and other people hurting.

There's a lot of spin-off economic values to the hog industry and even those businesses are hurting just due to the fact that the producers don't have money to pay some of those bills.

The impact on that would just be huge I think for the economy as a whole.

Mr Kynoch is scheduled to meet later this month with Manitoba agriculture minister Rosann Wowchuk.

He says producers need to know what the government can do to help and he is looking forward to seeing what options the minister's staff has come up with.

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CPC Launches Traceability Ear Tag Distribution
CANADA - The Canadian Pork Council has launched the distribution of its traceability ear tags as part of the development of a national swine traceability system, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
To improve the pork industry's ability to respond to an animal disease outbreak, the Canadian Pork Council is developing a national swine traceability system.

Traceability program manager Jeff Clark says the initial focus of the tag portion of the system is getting the tags into the breeding herds.

Jeff Clark-Canadian Pork Council
Since most breeding animals have tags already for barn management purposes, we've tried to create a tag that can suit those needs as well so it's a very practical tag.

Again one of our key components to developing a traceability program is we want to make it valuable to the producer not just for fighting disease or potentially getting enhanced market access around the world but we want to try to create a business tool that can help producers do their business.

There's two types of tags.

One is kind of a rectangular shaped tag, the other is a triangular or trapezoid shaped tag.

Both of them will have printed on them a unique traceability number for the animal but there's also room on it for a barn management number that the producer can have custom printed on there with their order so it also suits the needs of their barn management.

On the reverse of the tag, the female portion, we make a few different options available.

One is a button, the other is a secondary panel and those are available in six different colors.

A third option is an RFID or electronic identifier button and that's only available in yellow.

I should also mention our male panel, the front of it, is yellow only as well.

The male panel itself is the national tag, it has our logo on there and we want that to be internationally recognized.

Mr Clark says, as of now, producers in Manitoba and Saskatchewan can place orders and the other provinces will come on line within the next few days or the next few weeks.

[mikey]

Monday, October 05, 2009
Program Available for Canadian Pork Producers
CANADA - Canadian pork producers can start applying for government-backed loans on Monday. Applications will also be available for the Hog Farm Transition Program starting this week.

 

“We’ve worked in lock-step with the Canadian Pork Council to make sure the details of these important programs hit the target for producers at the farm gate,” said Agriculture Minister Gerry Ritz. “We know the Canadian pork ind ustry can be profitable and that’s why we’re offering government-backed loans to help them weather the current economic storm. But we also know the industry needs to restructure and we’re working with the Canadian Pork Council to deliver funding for those who need to transition to another sector.”

“These programs work hand-in-hand and they are flexible to meet producers’ individual needs,” said Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture). “In the end, putting Farmers First means letting farmers choose the program that works best for them.”

Starting today, 5 October 2009, many financial institutions, including Farm Credit Canada, will be ready to work with pork producers to develop long -term business plans and deliver Government-backed loans. Producers can click here to find out which institutions are currently participating. The commercially based loans will be negotiated for each specific farm operation and based on viable business plans. By using government backed loans, Canadian pork producers will have better access to credit and the opportunity to restructure for the long term.

The Government of Canada and the Canadian Pork Council are also partnering to deliver $75 million through the Hog Farm Transition Program. The Canadian Pork Council will have registration forms for the program available to producers on 8 October 2009. The program will be retroactive to 1 April 2009, therefore, producers who depopulate their barns prior to applying for the program will still be eligible. Applications will be based on a tendering process that allows producers to bid for the amount of funding they require to take their barns out of operation for at least three years. Producers will be able to visit the Canadian Pork Council’s web site for the most up-to-date information and registration forms on 8 October 2009.

"These are important programs; one will allow producers to access credit they need to manage through the current difficulties while the other will provide assistance to set aside production,” said Jurgen Preugschas, Chair of the Canadian Pork Council. “We have been working in collaboration with Minister Ritz to ensure that these programs address the needs of producers."

These programs are in addition to the $17-million International Pork Marketing Fund the Government of Canada is investing for market research, promotion and access initiatives to find new customers for Canadian pork products.

[mikey]

Pork Commentary: Markets Continue to Languish
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
You need to go no further than the breathless daily reports of pandemic fantasies. Someday the reporting of a flu which is something that is a daily occurrence will become irrelevant. Until then, it will be real hard for our market to get any positive traction. The dismal part is losses of $30 per head are commonplace. Two years of real pain is taking a heavy toll with US sow slaughter continuing to run around 70,000 a week a sure sign of real breeding herd liquidation.

This coming week it appears the Canadian Government will announce the rules and criteria for its loan guarantee and herd retirement programs. It will in the end, result in fewer sows in Canada, cutting production. The Canadian sow herd has already decreased over 12 per cent from its peak inventory.


We have talked to some hog equipment suppliers and the only business they are getting is replacement equipment for existing infrastructures. We had the huge building phase from 1995 – 1998. Many of those barns now need major renovations. There is little capital to get this accomplished. Lots of wire holding pens in place. We better get some positive cash flow soon or many barns will be beyond the point of no return.


Corn and Soybean crops continue to get larger according to some reporting services. Wheat has dropped $2.00 a bushel in the last couple months hitting contract lows. Huge Soybean crops being predicted out of South America. It appears there will be enough feed stuffs over the next few months to prevent another feed price shock. The wildcard is ethanol and export demand. A weak US dollar could enhance exports by increasing foreign purchasing power.


Early weans continue to rise. Now up last week with cash prices hitting $36 as a high and with a $25 average. The USDA September inventory reported 4 per cent less pigs less than 60 pounds. Assuming this is correct we expect to see continual early wean price enhancement.


We had some visitors at Genesus this week from China. They report China hog prices are $1.80 US a kilogram or 82 cents US live weight per pound. We were told good Chinese producers are making $20.00 US per head. Breakeven is over 70 cents US per pound. In China, there has been government support to keep sows in production but it only is $15 US per sow. Below average producers are losing money. China has expanded hog production an average of 20 million head a year over the last seven years. Greater disposal income, the love of pork and 1.3 billion consumers are great demand drivers.


This past week we toured Conestoga Meats in Ontario with our Chinese group. Conestoga is owned by independent producers and harvest about 14,000 head a week. Conestoga has developed its own brands and markets. Unlike the Meadowbrook co – operative in Illinois the Conestoga producers have kept control of its destiny with an active producer board. Currently, Conestoga has new construction underway to expand its processing capacity. It’s good to see the positive results of 150 producers working together. I am particularly proud to see Conestoga’s success knowing my deceased father was the founding chairman and one of the principal advocates of this producers group. He always believed that when producers get together their combined capital wherewithal could rival any major corporation. There is no magic in business, you have a plan and then you execute.
This coming week we will go to Moscow to attend the Golden Autumn Agriculture Exhibition. We will update the Russian swine market in next week’s commentary.


Author: Jim Long, President & CEO, Genesus Genetics