Pork Commentary
Jim Long President-CEO Genesus Inc.
December 12, 2022
Last week we attended the Midwest Pork Conference held in Lebanon, Indiana. Organized by the Indiana Pork Producers Association it attracted producers and exhibitors from the state of Indiana, Ohio, Michigan, and Illinois.
Our Observations
- As our industry consolidates there are fewer vendors and producers. Less people selling to less people. Not that many years ago a similar event was held in Indianapolis at the Indiana Convention Center a large and expensive venue with many vendors and producers attending. It’s not necessary to have such a site anymore. Consolidation has led to fewer producers and vendors.
- Last week’s Midwest Pork Conference was well organized and the facility was good. Keynote speakers brought interesting perspectives and breakout sessions had good production topics and were well attended.
- The exhibits were fewer than in the past, a reflection of the consolidation we have seen. For example, in years past there would have been up to 20 plus exhibitors selling swine genetics, including Indiana-based companies. This past week including Genesus there were five. None from Indiana and three of the five are based in Europe.
- Our sense from talking to exhibitors and producers last week is the sow herd is continuing to contract. The combination of producer profitability being next to non-existent and high feed prices is contributing to less sows. Steve Meyer ag economist was one of the speakers and he reported that since 2004 to date the average producer has made a profit of $2.04 per head. A staggering low number is not conducive to optimism or reinvestment.
Is there any wonder there are next to no new players entering the swine industry? It appears it’s only the marooned that continue production.
- Jayson Lusk an ag-economist from Purdue University spoke. He reported only 25% of the retail pork price comes from the producer hog price. Tells us the hog price has to be significant to really alter retail pork prices. Recently retail pork price is near record levels.
- Last week it was nice to speak to a number of readers of the commentary. It’s interesting the number of people who believe as an industry we need to produce better-tasting pork to increase demand. The second part is the number of producers who affirm the prolapse problem and high sow mortality in certain genetic lines. Many agree – Dead sows don’t produce pigs
- Not sure what the data says but from conversations last week there appears to be PRRS and PED hitting more than enough producers.
- Speakers at the conference spoke of California Prop 12. Now delayed until summer 2023 while waiting for the Supreme Court decision if it is legal. It was reported about 300,000 sows in the U.S. are currently Prop 12 compliant, the estimate is 600,000 are needed to feed California – 10% of U.S. sow herd. Prop 12 herds with breeding in pens will be seeing lower farrowing rates and litter size which not only lowers production but increases the cost of production. Need more money to produce Prop 12 pigs. We were told ½ to 1 pig per litter decrease, 5-10% lower farrowing rate than breeding in stalls and holding over 35 days post-breeding.
- We sense the U.S. supply of hogs is decreasing. The summer hogs have been bred and made. There is no way in our opinion we won’t have less hogs in summer 2023 than 2022. The lean hog futures are significantly undervalued to the reality we expect. There will be less beef, there will be less turkey and eggs due to Avian Flu. There will be less pork in Europe and they will have less to export. China already has less pork production and will pull pork in. October U.S. pork exports were the largest in more than a year (June 2021). We expect the trend will continue as the world pork supply declines. We need to get through the next few weeks of the shortened holiday weeks but we believe 2023 will have very strong prices.
Jersey Red Duroc
Genesus has believed for over two decades that as an industry we should be producing pork that is more marbled, redder, and juicier – Taste matters. Our Jersey Red Duroc continually dominates taste tests globally. The link below is Genesus’ Chef Glenn Mckenzie Smith preparing Genesus Jersey Red Duroc pork. If as an industry we are going to grow pork demand we need to deliver a better eating experience. When is it bad business to have a better product?
Click on the below link to watch Jersey Red Duroc – Pork Chop video:
