Canadian Pork Producers:

[mikey]

Full Restoration of Pork Exports to Russia Expected
CANADA - Canada's Agriculture Minister is hopeful the flow of Canadian pork into Russia will be fully restored following inspections of Canadian processing plants by Russian officials next month, 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 May, in response to the spread of H1N1 influenza Russia imposed bans on the import of live pigs and raw pork and pork products from several Canadian provinces.

By the end of June bans had been lifted on products from Alberta, Nova Scotia, British Columbia and Quebec and in mid-July remaining bans on products from Ontario were lifted.

Speaking to reporters yesterday following a trade mission to Russia, which included representatives of the Canadian Beef Breeds Council, the Canadian Beef Export Federation, Canada Pork International and Alta Export International, agriculture minister Gerry Ritz indicated he hopes to see a full restoration of the movement of Canadian pork into Russia following inspections slated for next month of Canadian pork processing plants that had been de-listed.

Gerry Ritz-Canada Minister of Agriculture and Agri-Food
We're in the midst of continuing work on that file.

It's a matter of having some Russian officials travel to Canada to re-open some of the plants that were de-listed.

We're quite buoyed by the fact there seems to be a mood to get that done very very quickly.

We're also moving forward on the quantity of trim, pork trim that will be allowed back into Russia.

Russia has become a major player in the production of pork and they do require other parts of the pig that we supply, predominantly the trim.

They bring a number of tonnes of pork in from Brazil, half carcass on the rail.

We don't supply our pork that way but we do supply the trim which of course they use here for a lot of their sausage and secondary processing.

Mr Ritz notes the delegation of Russian experts is scheduled to visit Canada next month to look at those de-listed plants to identify what's been done to address the situation at which point those plants can be re-certified.

He says he's hopeful, once those inspections have been completed, the process will be able to move forward quickly.

[mikey]

Thursday, October 15, 2009Print This Page
Pork Commentary: Russian Road Trip
RUSSIA - Jim Long, President and CEO of Genesus Inc., writes, "This past week we have been in Russia attending the large agriculture exhibition Golden Autumn in Moscow."

Jim Long is President &
CEO of Genesus Genetics.
Our observations:

The Global Financial Crisis hit Russia like many other countries; several projects stopped on the spot. Now it appears the economy is recovering, but financing is still hard to get.


Hog farmers are living in what we would consider in North America as a Utopia. Market hogs are bringing around $250 per head and profits of $100 per head plus. Actually, we had a couple of Russian producers tell us they were unhappy with $100 per head profit as they had, for a while, been making close to $150. Boo hoo!


There continues to be much interest in expanding swine production. The Russian Government has earmarked $35 billion US dollars for agriculture investments. We were told by a couple of producers that approvals are extremely slow.


Brazil seems to be a scapegoat to Russian producers for what they say is “dumping pork”. Not sure it’s dumping, but Brazil’s hog price is 40 per cent of Russia’s.


There are still millions of acres of decent agricultural land laying fallow in Russia. Large tracts are being bundled for cropping which is a huge stimulus for Ag equipment. Land is being rented in these large tracts by investment groups for around $7.00 an acre for 49 years. We can thank the US corn ethanol program that drove up the price of grains for encouraging the re-development of crop land. We believe $7.00 an acre for land has created a long-term grain farming business.


Several lease land deals from the government has the provision that livestock must be developed on the land. For example, one group we talked to has assembled 44,000 acres in the last year. They are just beginning construction on their first sow unit with a goal of 15,000 sows. The Russian swine model is you grow your own grain, put the manure on the land and slaughter your own hogs. Truly integrated.


We are hopeful this group will work with Genesus. At a reception at the Canadian Embassy the company’s director was adamant to have a picture with us and the Chairman of the Canadian Senate Foreign Affairs Council who was a guest of honour. He told the Chairman their group had decided on Genesus because, they were confident Genesus was the best in the world. It was nice to get such recognition in a foreign country to a leading member of the Canadian Government.


Also at the embassy reception was Canada’s Minister of Agriculture – Gerry Ritz. We asked him his thoughts on the new loan guarantee program for Canadian swine producers. He was pleased that the Government rule prohibits banks to have their guarantee honoured if they foreclose on a swine farm. This he feels will protect farmers from aggressive banks.


As we write we are on a plane flying from Moscow 800 miles south to Krasnador – situated between the Black and Caspian Seas. This is Russia’s best agricultural area. We are meeting customers and prospects where we’ll give further Russian observations next week.
Markets
Internet allows us to follow our markets at home. We see corn continue to increase hitting $3.62 a bushel Friday. USDA keeps increasing yields and production and the price continues to increase. Sure would be nice if increased pork production could lead to higher prices.


Iowa-Minnesota last Friday 48.37 lean which probably means a lot of producers continue to lose $30.00 per head. These financial losses continue to keep sow slaughter strong with 68,000 plus in the latest reported week. We expect the US-Canada sow inventory is decreasing 10,000 plus per week.


This past week we saw some strength in the lean hog futures with the June contract closing Friday at $72.375. Not fantastic, but almost $50.00 per head better than now. The money in Chicago is betting that by summer demand will be higher and supply lower. We expect the same.
The US hog marketing last week were 2.299 million down from last year’s 2.374 million or 75,000 head. The latest Iowa-Minnesota weights were 268.4, 2.5 lbs higher than the same week a year ago. Considering not many weeks ago, year over year weights were 8 lbs greater, the narrowing of the year over year weights is positive for supply currentness.


Author: Jim Long, President & CEO, Genesus Genetics

[mikey]

Monday, October 19, 2009
Canadian Govt Invests in International Pork Marketing
CANADA - The Government of Canada is investing in marketing world-class, safe and healthy Canadian pork in international markets.



On Friday (16 October), Parliamentary Secretary to the Minister of Agriculture Pierre Lemieux announced an investment of $550,000 to support the work of Canada Pork International (CPI).

"Our pork producers and processors are known for their safe, high-quality, world-class products, but they need to be able to sell more around the world," said Mr. Lemieux. "This investment will help CPI access more international customers and boost the bottom line for our producers."

This investment will help CPI develop a promotional campaign for Canadian pork in international markets including obtaining, maintaining and enhancing access to markets, providing producers with market information, technical support, promotional and advocacy tools, and addressing regulatory and logistic challenges.

"Our Government understands the importance of the pork industry to my riding, to Ontario and to Canada," said Member of Parliament Bev Shipley (Lambton-Kent-Middlesex), who made the announcement with Mr Lemieux in Strathroy, Ontario. "We're making great progress on the expansion of our markets internationally and this announcement will further that goal."

The AgriMarketing Program, a four-year $88 million initiative, assists producers and processors to increase exports of Canada's safe, high-quality world-class products around the world. The program provides funding for industry associations to develop and implement long-term international strategies and to undertake activities such as international market development, brand-building and industry-to-industry trade advocacy. Launched on 7 April 2009, the AgriMarketing program is part of the Trade and Market Development Program under Growing Forward.

[mikey]

Pork Industry Facing Range of Challenges
CANADA - The Saskatchewan Pork Development Board says its new board of directors will need to address a range of challenges, 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. 
Ballots are now in the hands of producers for the Saskatchewan Pork Development Board's 2010 board of directors election.

Nine candidates are vying for six seats on the board.

Sask Pork general Manager Neil Ketilson says there are four key issues the new board will need to address.

Neil Ketilson-Saskatchewan Pork Development Board
We need to think about the sustainability of the industry in this province, who the players are right now, what we need to do to maintain and encourage production here and how do we maintain our competitive edge in the global market place.

That's first and foremost.

Secondly, and I think it's part and parcel with that, is Saskatchewan does not have a federally inspected packing plant and I think we all recognize that that is a negative aspect of production here in the province.

We need to continue to work on strategies either to enhance our ability to have a packing plant at some point in time and or cooperate with the other packing plants that are our there and see if we can't mitigate the costs of the long transportation costs.

Thirdly I think we've all recognized that financially the industry has gone through some very difficult times and we need to make sure that the government programs that are out there both federal and provincial meet the needs of the industry both the present day as well as into the future so we've got a lot of work to do there.

Fourthly we need to make sure that we are doing the things for the international as well as the domestic market that make a difference for us.

Things like traceability, the animal welfare, all those kinds of basic core things that we need to do as an industry are done and done well and done consistently across the country.

Sask Pork's new board of directors will be announced on 17 November in Saskatoon.

 

[mikey]

Pork Commentary: Russian Road Trip - Week 2
RUSSIA - This week's pork commentary by Jim Long again focuses on the Russian hog market.

Jim Long is President &
CEO of Genesus Genetics.
It’s Monday and we have left Moscow heading to Zurich Switzerland. We have just finished our second week in Russia.

Our Observations
Feed in Russia is about as cheap as anywhere in the world. Wheat is $90.00 US per tonne or about $2.50 US per bushel. It makes you wonder if the vast quantities of wheat in Russia at this price will not keep a lid on feed prices in North America when global grain trade is in play. You can see why companies like Cargill (major presence in Russia) have a leg up in market intelligence and global grain movement.


Obviously low wheat prices though making it hard for grain farmers is a boom for Russia hog production costs. Hogs at $1.35 US live weight per pound and $2.50 per bushel of wheat. Hog producer’s utopia.


We visited one of our customers last week. They are the largest farming operation in Russia and Europe. These are their facts 220,000 acres of crop land, 1 million laying hens, 50,000 broiler chickens a day, 7,000 dairy cattle, 3,000 sows (Genesus), sugar beets, 22,000 beef cattle, and 11,000 employees. All products are processed by themselves, then sold in one of their 200 plus retail stores. From what we know this must be the most truly vertically integrated agri – business in the world. As we said to the managing director ‘You are almost bigger in land holdings than Portugal!’ Like Americans, Russians have no problem with the concept of scale.


Last week we covered several hundred miles in the Southern Russia Kubanregion (land mass between Black and Caspian Sea). Wall to wall grain farms with many coming in production in the last two years. Americans corn ethanol program and the increasing of global grain prices have stimulated the rebirth of Russian grain production. Russian producers can thank the American Government and taxpayers (corn ethanol boondoggle).


To understand the scope of farms we visited another Genesus customer with 120,000 acres of cropland, another Genesus customer with 40,000 acres, prospects with 100,000 acres and 30,000 acres. They all want to feed their grain to livestock.


Russia is importing roughly 30 – 50 per cent of its meat (we hear different numbers). High tariffs keep prices supported. There are hog production facilities under construction but the global financial crisis has slowed things down. Russia is the largest exporter of natural gas and oil in the world. Oil is over $70.00 is creating Russia national capital for agriculture investment.


Russia swine producers are still playing catch up with technical and employee training. The industry by and large has few knowledgeable swine people to train or lead swine production. Normal production is 14 pigs per year. Consequently, at Genesus we have made available to our customers a 1700 page Russian language production teaching manual detailing all functions on a swine farm, customized Russian language production recording software and in some instances, we have placed full time production experts to teach and co – manage. We hope the recent opening of our Genesus Russia office in Moscow will help give us augmented service. John MacIntosh who has lived in Russia 17 years will be our director.
Markets
US hog marketings continue to run under a year ago last week. 2.295 million which is 62,000 fewer than the same week a year ago. We expect year over year marketings will continue to be lower as the effect of ongoing sow herd liquidation cuts production capacity.

It was good to observe USDA cut – outs increase 3.00 from the end of the prior week. Cut – outs at 56.40 and Iowa – Minnesota at 49.31, give us hope that demand for pork is improving some. Of note it does not appear H1N1 (swine flu) fear is affecting Russian markets. To some extent we observe the media (CNN) and Government paranoia is the highest in North America. Aren’t we lucky!

The carnage continues to affect different players with one of Canada’s largest hog producers bailing on 7,500 sows. Cash losses are weakening even the most perceived to be strong organizations. $30.00 per head losses on top of financial shortfalls of 26 months is devastating. The hole we have dug is deep, when profits return (which they will). It will take a long time to get producers back to where they were two years ago. We got to get through the fall and early winter but June at 74 lean gives some profits and hedging opportunities. There was a time a couple of months with no months on the board allowing a position of potential profit.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Monday, October 26, 2009
Brisk Interest Seen in Hog Farm Transition Program
CANADA - The Canadian Pork Council reports producers from every province have registered for the first round of bidding under the Hog Farm Transition Program, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The 75 million dollar Hog Farm Transition Program allows Canadian pork producers to submit tenders for closing their production facilities for a minimum of three years.

The first ten million dollars under the program will be awarded on 28 October.

Canadian Pork Council President Jurgen Preugschas says bids have come in from right across Canada for the first round.

Jurgen Preugschas-Canadian Pork Council
Every producer is required, first of all, to register.

At present we've got quite a number of applications in already and they all have to be verified of course.

Welsh and Company is the company that we hired out of Ottawa, an auditing firm that is doing the actual work on it, and they go through the application of registration, make sure everything's OK and then they actually send out a bid form to those producers that are eligible and the producers then will be required to send their bid form back to Welsh and Company's office by 2:00 p.m. eastern Standard time on Wednesday.

The bulk of the registrations so far that have come in are from Ontario but we have had registrations from every province in Canada.

There's been a lot of calls from across the country and those producers that are interested are in the process of being registered.

Mr Preugschas notes the CPC will make public as much information on the value of winning bids as possible in order to assist producers bidding in subsequent rounds.

He says the intent is to hold subsequent rounds and disperse the 75 million dollar fund as quickly as possible.

 

[mikey]

Wednesday, October 28, 2009
Pork Commentary: Back to Reality - And It Isn't Pretty
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
After being in Russia for two weeks and being with producers making $100 per head it’s a wicked dose of reality coming back home to the train wreck we are experiencing in our markets. Iowa – Minnesota last Friday was 51.09 lean average. This means most producers are losing $25.00 per head. The H1N1 (swine flu) trouble continues to pound our product daily. Hour after hour of talking heads drumming up a pandemic. No wars to start so they need something to talk about. Some supposed facts we came across:

250,000 to 500,000 worldwide die each year from seasonal influenza, according to the World Health Organization (WHO).


399,232 number of confirmed H1N1 influenza cases as of 11 October (WHO).


4,735 number of reported deaths associated with H1N1 influenza as of 11 October (WHO).


H1N1 has killed fewer people (4,735) over the past six months than the seasonal flu kills every six days (700 per day).


Remember in 2005 the United Nations “flu czar” frightened the world when he announced that the Avian Flu could kill as many as 150 million worldwide.
EDITORS NOTE: He was wrong! Avian Flu! Swine Flu! Cattle or sheep better look out – You’re next!


This is a great opportunity for the drug industry. Vaccines are on the way, they probably need to get them out fast so that the billions being spent can get burned up before the real reality sets in – it is a mild flu.
Meanwhile the thousands of people in the swine industry get hammered financially by a wrong moniker. 26 months of losses in the billions have now been extended and magnified. Where Washington helped Wall Street in a crisis created by their greed and stupidity. Hog producers are left to fend for themselves with no financial support of significance and tepid efforts to maintain pork export markets. Shut down by H1N1 fears.

There is money (subsidies) to burn corn as ethanol, and tariffs to protect them. There is nothing for livestock. Every society’s standard of living can be measured by its meat protein consumption. The higher the consumption the better the standard of living. We are now approaching an almost systematic attack pushing our costs higher (corn) and demand lower (swine flu, market access); little is being done by our elected officials to protect us. It is sad and it is wrong.

Meanwhile, sow liquidation continues with each week more people running out of capital and/or courage. There will be less hogs in the future. Prices will recover. When they do it will be with a vengeance. Like mad cow, like avian flu, people will soon forget.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Transport to Slaughterhouse on Welfare Agenda
CANADA - A Liberal MP is seeks to cut lengthy transport times for livestock on way to the slaughterhouse.



Chickens cannot vote and there are no pigs on the list of registered lobbyists but a Quebec Liberal MP is rushing to the aid of tired and thirsty livestock on their way to your plate.

"We would like animals in transit from farms to slaughterhouses to be given some sort of respect and comfort until they get to the slaughterhouse," Alexandra Mendes (Brossard-La Prairie) told Canada's The Star about her private member's bill to amend federal regulations on food and water for animals in transit.

The current rules allow cattle, sheep, goats and other ruminants to be confined on the road for up to 48 hours without food or water – or 52 hours if they reach their final destination in Canada before then.

Horses, pigs and other animals with one stomach can be held in the same hungry and thirsty state for no more than 36 hours.

"I was literally flabbergasted," Ms Mendes said after a constituent informed her of the time limits. "I had no idea that those were the rules we were still running things under."

Her bill would lower the limit to 12 hours for the ruminants and eight hours for the other animals to match standards in the European Union.

New Democrat agriculture critic, Alex Atamanenko, seconded the bill when Ms Mendes introduced it to the House of Commons on 28 October.

Animal welfare groups applauded the move
"Canadian animal transport standards are among the worst in the industrialised world, so I guess this bill is a fantastic move forward. It's long overdue," said Rebecca Aldworth, director of the Humane Society International Canada. "The Canadian government has been very slow in modifying its transport regulations and has seen to be somewhat reluctant to follow the example set by the European Union."

Ms Aldworth said Canada being a bigger country than any nation in Europe has little to do with the standards here.

"If we require a 72-hour journey, for example, to get an animal to a slaughterhouse, it's clear that a more local slaughterhouse needs to be built," she told The Star.

She said one company often owns several major farms and a slaughterhouse and so they ship animals from all over the place to a central slaughterhouse to keep everything in the business.

"There is absolutely no reason why we shouldn't have federally inspected slaughterhouses in reasonable distances from the farms that are producing the animals," she said.

Stephanie Brown, a director of the Canadian Coalition of Farm Animals, said an estimated three million animals die on their way to slaughterhouses every year and another 11 million arrive with diseases or otherwise unfit for human consumption.

"They might be crushed to death because the density is too high. They may be stressed from high temperatures," she said. "Animals sometimes freeze to the side of the trucks."

Ms Brown praised the bill. She said: "The current standards are totally out of date and they are inhumane. They desperately need to be changed."

According to The Star, a spokesman for the Canadian Food Inspection Agency said the federal food safety watchdog could not comment on the feasibility of a bill that has yet to be debated in the House.

[mikey]

Tuesday, November 03, 2009Print This Page
Pork Commentary: US and Canada Inventory
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
Last week the last quarter’s United States – Canada USA inventory report was released.

September Report
USA - Canada Hogs and Pigs Inventory based on 1000 head
  2007 2008 2009
Kept for breeding 7,752 7,478 7,227
Market 73,883 73,463 71,219
Sows Farrowed 3,927 3,848 3,698
Pig Crop 36,681 36,819 36,028

Our Observations
United States and Canadian breeding inventory was 7,752 on the combined report September two years ago. Since then our industry has had almost continual losses with estimates reaching up to $7 billion in industry wide financial losses. Therefore it is not really surprising. The combined breeding herd has declined 525,000. In the last quarter from the June Report our combined breeding herd decline was 115,000. The sad part is these are not just numbers but a story in itself of people not having the capital and/or courage to continue. It is nothing to be proud of the failure of pork demand. So many good people have left this business. Too many producers’ dreams and futures have been dashed by crushing financial losses.


The combined United States – Canada market inventory is down 2.224 million head from a year ago. (we had predicted 2.3 million). The combined inventory was also down 2.664 million from two years ago. If we assume 27 weeks to get a hog from birth to market (189 days). If we divide 2.224 million head decline by 27 weeks we come up with an average combined weekly marketing’s of 82,000 head fewer year over year in the coming six months. (of note: US hog marketing’s last week were 85,000 less than the same week a year ago). Bottom line: approximately 82,000 fewer week upon week is significant and will be price supportive.


If we take combined pig crop last quarter and multiply by four quarters and divide by breeding inventory we come up with a production trend line. We did it for the three years.
2007 18.92
2008 19.69
2009 19.94

These are not absolute or totally accurate but certainly show there are major productivity gains ongoing. This helps cost of productions but certainly puts more pork on the market. Circo virus vaccines and rapid gains in utilitization of prolific genetics are major contributors of this increase.

We believe the combined United States – Canada inventories are quite important. A continental market with trade in live pigs and pork makes the total supply a significant driver in price directions. It’s the reality of market interdependence.
Market News
China announced last week that it would begin trade again with US for pork imports. It had been stopped for H1N1 reasons for several months. We do not expect this in itself to be a panaceato push markets higher but it should help. The most recent prices we have for China are approximately 95 cents US per pound lean price (live weight 74 cents). Prices that obviously we would love. There are reports from China that Blue Ear (prrs, circo, etc...) is again hitting production to a greater extent. Lean prices of 95 cents – you know that is a reflection of supply and demand. With our lean price of around 50 cents per pound there will be entrepreneurs who will figure out how to get some US pork into a 95 cent lean market. China’s acceptance of US pork is price supportive but it will not likely bring the price surge we saw fifteen months ago from huge sales to China.


Russia - African Swine Fever has moved from the southern Caucasus region to the northern region of Russia – a jump of 1,000 miles. This could lead to large scale herd eradication. It is not happening yet, but something to watch – closely!!!


Mexico’s slaughter prices have weakened somewhat down from 19 pesos to an average of 16.5 in Mexico City which is still approximately 56 cents US live weight per pound. The $40.00 per head plus difference between US and Mexico’s price is a reflection of the huge decline in Mexico’s breeding herd (down from one million to approximately 650,000 in the last two years). The price spread between Mexico and the United States will continue to enhance Mexico’s importation of pork from the US.


The US lean hog price year over year is about 6 cents lower than last year. It’s narrowing, at some points it was 20 cents plus lower year over year. Maybe demand relative to supply is starting to move to a better place.


The DTN – Agdayta calculation of what you can pay for 40 pound feeder pig is now $44.00. At the first part of August the calculation was negative. In the last ninety days a $44.00 plus increase. A reflection of better lean hog futures. In midsummer there were no months in 2010 that lean hog futures reflected anything but financial losses at current cost of productions. Things have gotten a little better with April through August lean hog futures (5 months) now in profit territory. Unfortunately it’s still 5 months until April.


The latest US sow marketing’s were just over 66,000 for the week. Sow liquidation has slowed, it is still happening but not at the 9,000 a week we averaged last quarter.
Summary
The combined United States – Canada inventories reflect continual decline in continental production and supply. China’s opening to US pork is price supportive. Unlike some commentators paid by the NPPC, we do not believe lean hog futures are overvalued. We believe as H1N1 domestically and globally becomes a memory by the spring and summer coupled with a domestic and global economy coming out of a recession, there is room for higher lean hog futures. That being said, everyone has their ability to take risks. No one has gone broke from taking profits.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Wednesday, November 04, 2009Print This Page
Hog Market Profitability Projected Mid-2010
CANADA - Informa Economics is projecting a return to profitability in the hog industry toward the middle of 2010 gaining momentum toward the end of the 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. 
Canadian hog producers have faced prolonged losses as resulting from factors such as excess hog supply, increased input costs, the rising value of the Canadian dollar and the effects of US Country of Origin Labelling.

Informa Economics vice-president Dave Reimann says we've seen a little more stability over the last couple of months as producers have cut production but we've seen some recovery in feed prices which, in combination with the rising value of the Canadian dollar, has neutralized some of the recovery.

Dave Reimann-Informa Economics
We've constantly seen reduction in herd sizes and most of the statistics seem to bear out that people are cutting back on both sides of the border.

I think Canada has been at that in a much more serious tone for much longer than the American producers have.

The only problem with that is that it still seems that there is constantly more supply coming to market than the statistics would bear out.

I suppose that suggests that there is really more hogs on many of these farms than maybe the USDA or Stats-Can understands or knows about at this point.

However the truth is there's been a serious cull going on now for quite some time and is still ongoing.

This is where I think most of our analysts are expecting the sector to start to return to some profitability in the middle of next and into the last half because by that point we're expecting those hog numbers will be down long enough to have actually had some impact and start to really hit the meat supplies and maybe start to drive up prices from that sector.

Mr Reimann says the hog market is still under a lot of pressure and most analysts involved with the sector in his company are still looking for some recovery and some return to profitability but unfortunately it still doesn't look like there's much hope for that until at least the middle of next year and probably not gaining any really good momentum until late in 2010.

[mikey]

CPC Urges Action on Canada-Columbia FTA
CANADA - The Canadian Pork Council is urging the federal government to make the ratification and implementation of a bilateral free trade agreement with Columbia a top priority, 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. 
Canada and Columbia have reached an agreement that will see the phasing down of in quota tariffs on pork over five years and the elimination of over quota tariffs eight years after that but the deal must be approved by parliament to take effect.

Canadian Pork Council Executive Director Martin Rice says the US has a pending free trade agreement with Columbia which provides for full elimination of tariffs over a much shorter time frame.

Martin Rice-Canadian Pork Council
The US Columbia deal eliminates all of the tariffs that apply to pork from the US in a much shorter period of time than us, under 10 years actually.

If their agreement were to go into place tomorrow we would find ourselves within five years being at quite a significant disadvantage to the United States.

However, if we look at the US agreement maybe needing to take another two to three years to get implemented, because the United States Congress has not been focusing on trade particularly, it could well be another couple of years so that would narrow significantly that period of time that we'll find ourselves at that disadvantage.

The size of these tariffs right now into Columbia are such that the US will have 10, 20, 30 per cent even advantage on tariff percentage levels over us within five years if we don't get our agreement in place soon.

Mr Rice notes the free agreement with Columbia is one of several that need to be concluded.

He says, given the breakdown of multilateral trade talks though the World Trade Organization, bilateral free trade agreements become that much more important for securing access to markets.

[mikey]

Monday, November 09, 2009Print This Page
Cull Breeding Swine Participants Comply with Programe
CANADA - The Canadian Association of Swine Veterinarians reports random audits indicate 100 percent compliance with requirements of the Cull Breeding Swine Programme, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The Cull Breeding Swine Programme provided payments to swine producers who agreed to depopulate breeding barns and leave those barns empty of breeding swine for a minimum of three years.

As a requirement of the program random audits are being conducted to confirm compliance.

Dr. Alan Theede, the secretary treasurer of the Canadian Association of Swine Veterinarians, says 100 audits are scheduled for this round and 85 per cent have been completed.

Clip-Dr. Alan Theede-Canadian Association of Swine Veterinarians
The inspections are being done by the swine veterinarians across the country, the people that are members of our Canadian Association of Swine Veterinarians.

Really these are the practicing veterinarians that are out in the rural areas generally and have been providing animal health and management services to swine producers across the country.

We've got about 85 of the 100 finished and virtually 100 percent are in compliance.

There's a couple of sites where we've just got to go back and figure out where the animals are in relation to the cull space and so on.

In almost all cases the complete barn was culled and even in some of the cases the barns have been bulldozed down and they aren't even there any more.

But there are some sites where people for example had 100 breeding sows on their site and they've maybe rearranged the flow on their barn so that they kept 400 or 500 sows and we've just go to sort out which barn was supposed to be empty and that sort of thing.

Dr. Theede says 15 to 20 per cent of the barns audited so far are now being used to house nursery or grow finish pigs, which is allowed under the program, while most of the remaining barns are either sitting empty or being used for storage or some other farm activit

[mikey]

Tuesday, November 10, 2009Print This Page
Pork Commentary: There's a Glimmer of Hope
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
We are usually accused, and rightfully so of being optimistic. We are guilty! We can’t help it that is what we are. Anyway, the following is a roundup of optimistic items in the swine industry.

USA consumer’s pork demand is year over year up 4 per cent (January – September 2009). Pork is up while chicken is down 2.9 per cent and beef is down 2.3 per cent.


December corn has dropped from $4.03/bushel on 22 October to closing last Friday, November 6 at 3.67/bushel. That’s a decline of 36 cents a bushel in two weeks. Breakevens to produce hogs are lowering.


June 2010 lean hogs closed on 19 August at $66.10 while last Friday 6 November, June 2010 hog futures closed at 75.925 putting 10 cents on the market or about $20 more per head. That is $20 everyone needs.


53-54 per cent National Daily lean base lean hog carcass was 56.47 last Thursday, 5 November. A year ago it was 56.71. For a long time we had hog prices significantly lower year over year. They are now the same.


Cash early wean pigs last week averaged $34.12 with some reaching $40.00. It’s a reflection of returning optimism, higher lean hog futures and a shortage of good quality weaned pigs. It’s not if but when early weans will push beyond $50.00. 90 days ago some cash early weans were $5.00 each. The surest cure to low prices is low prices.


USA latest market sow slaughter is 66,000. We are still liquidating. There will be fewer hogs next fall. No doubt.


Liquidation continues in Canada with Hytek – Canada’s largest pork powerhouse supposedly depopulating give or take 14,000 sows. There are reportedly 300 hog producers in Canada having applied for Canada’s Government Transition Program. This is a commitment that in return for Government money you keep your facilities out of production 3 years. There will be fewer sows in Canada’s future on top of the almost historic liquidation that has already happened.


The USA – Canada breeding herd in the latest combined report shows we are down 525,000 in the last two years. Fewer sows means fewer pigs.


The intention of China to begin to allow again pork imports from the USA is positive. Even if it’s only 1 per cent of US pork production its price positive to get pork out of the US domestic market. With China’s domestic hog price around 95 cents US lean per pound, there’s a good chance pork is going to China.


Since May, Pork Exports to Mexico have been up 38 per cent in volume year over year. We expect exports to Mexico to remain strong in the foreseeable future due to massive liquidation that has happened to Mexico’s swine herd. This is positive for lean hog futures.


The lean hog price is currently the same as it was in some point of this past summer. We are marketing 200,000 hogs more a week than in the summer. There sure has to be better demand if prices can be the same with 10 per cent more pork a week.


The latest USA – Canada market hog inventory indicates 2.25 million fewer hogs than a year ago. That’s 85,000 fewer hogs a week on average over the next 6 months. We will see higher prices year over year.
Summary
Fewer hogs are coming. Prices are recovering. Lean hog futures are improving. Feed prices are down. Early wean prices are gaining strength. We expect another $5.00 at least on summer lean hog futures. We know it’s still tough with many losing around $25.00 per head but there is a glimmer of hope. This is the dark before the dawn.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Big Sky Farms Files for Creditor Protection
CANADA - Big Sky Farms in Saskatchewan has applied for protection under the Companys' Creditors Arrangement Act (Canada) or CCAA.



 Big Sky President and CEO, Casey Smit, said: "The protracted downturn in the North American pork market prompted the company to seek court approval for creditor protection.

"Big Sky has consistently ranked in the top percentile of North American producers; however, the extended downturn and a recent collapse in hog prices associated with the risk of an H1N1 flu pandemic, which has resulted in an abatement of consumer demand for pork products, coupled with the rising Canadian dollar and American trade barriers left us no other option.

"While we are very sorry about the financial impact these proceedings will have on our valued suppliers, feed producers and others; we are very thankful and appreciative of the continuing support of these same suppliers, our customers, lenders and our employees. While today's actions are difficult, they will, in the long term, serve the varied interests of our many stakeholders, including our dedicated employees, by making the company healthier overall; a stronger entity better able to accommodate future fluctuations in market conditions" Mr Smit added.

Big Sky Farms is Saskatchewan's largest hog producer, delivering more than 900,000 animals to North American markets annually.

The company operates approximately 40 units in Saskatchewan and Manitoba employing more than 400 people. Big Sky remains focused on hog production in a safe and responsible manner, consistent with the registration of all it hog production facilities under the high standards of the Canadian Pork Council's Canadian Quality Assurance Program.

"The company will continue normal operations while under the court-ordered protection. All employees will remain on the job and to be paid in the normal course, including continuation of their ordinary course benefits. In addition, we will continue to provide our customers with the highest quality of product; consistent with that delivered in the past," said Mr Smit.

The CCAA process provides a period of time for the company to continue to operate while restructuring its financial obligations. The process involves the appointment of a monitor who assists the company through the restructuring process.

"Over the coming days and weeks, we will work with the company's advisors and stakeholders on a plan to restructure the company's financial obligations. As we have done over the past two years, we will continue to look for ways to improve profitability through revenue generation and the realisation of operational efficiencies," said Mr Smit.

Part of the restructuring effort will entail re-aligning the company to access federal government support programmes, including a recently announced loan guarantee program designed to support the industry.

Mr Smit added: "We are confident today's measures will facilitate access to these important industry support programmes. We are confident about our future."


 

[mikey]

New Programme Assists Manitoba Pork Producers
CANADA - Manitoba Agriculture Food and Rural Initiatives has launched a new programme under Growing Forward which will help producers with the purchase of needless injectors, 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. 
Needless injectors allow the administration of vaccines and other medications to livestock without the use of needles.

As part of the On-Farm Food Safety Program, offered under the federal-provincial Growing Forward Program, Manitoba Agriculture Food and Rural Initiatives will provide up to two thousand dollars to be applied toward the purchase of a needleless injector.

Business development specialist for swine Robyn Harte says farmers, their suppliers, assembly yards and livestock haulers are eligible to apply.

Robyn Harte-Manitoba Agriculture Food and Rural Initiatives
Animal welfare is a large component of a needleless injector.

The ease of use is another one but primarily the interest is having to not puncture the animal, reducing its stress and reducing the damage that can come from a needle injector so that's reducing things like abscesses or tears in the skin, those types of things.

The ease of use, which really can't be minimised, is also an important function.

It allows producers to move a lot more easily in the pens to vaccinate the animals and it also allows them to get into perhaps more awkward positions that a regular needle wouldn't allow because you wouldn't be able get the injection angle appropriate.

So needless injectors are devices that allow the user, whether it is a veterinarian or a producer, to deliver vaccine or medication without puncturing the skin as a traditional needle would.

Ms Harte says there are no specific application deadlines but funding is being offered on a first come first served basis.

She recommends obtaining approval prior to purchasing the equipment.