Jim Long President-CEO Genesus Inc.
April 9, 2023
After leaving Spain we went to the United Kingdom. Our report:
- The industry was devastated by huge losses the last two years. A combination of Covid related issues that led to massive backups of market hogs, high feed prices and low hog prices. There was major sow liquidation.
- Current hog prices are 2.13 British Pounds per kilogram carcass (97¢ lb. U.S. liveweight). We understand this is the highest price ever in the United Kingdom.
- Slaughter numbers the last few weeks are down 20 to 25% from a year ago. It’s what happens when that percentage of sows go to slaughter.
- Packers are scrambling for hogs due to the shortage of hogs. We expect from discussions with various people even fewer hogs will be available due to seasonality and sow liquidation. This is the same scenario we observed last week when we were in Spain and talked to various people at the Figan trade show. It is very likely the UK and European hog prices have upside beyond already record prices.
- About half of the UK’s hogs are outdoors. Many of these are owned by Packers. From what we understand producers receive 20 British Pounds ($25 U.S.) premium for these pigs which are part of the Freedom Food program. Producers told us they needed this premium to cover lower sow production in outside farrowing huts and higher feed conversion in outside finishing sheds.
- The UK with the lower hog numbers will be importing about 60% of its pork needs. All from Europe. UK used to have 800,000 sows, now it’s under 250,000. There have been over the last two decades multiple animal welfare mandates that have driven up costs a production and left the UK industry vulnerable to cheaper imports not encumbered by similar rules. It appears that the bulk of consumers have little regard for many labels (animal welfare, nationality, housing, etc.) when it comes to purchasing pork.
- In the UK retailers seem to have more power to dictate pork products than anywhere we have visited. Lots of pork is labeled to retailers’ brands at plants and even priced before it leaves the plant becoming shelf ready.
- A producer told us that the total sales of ready-made sandwiches is greater than all farmed products produced in the UK. Tells us that there are a lot of ready-made sandwiches and reflection of the amount of ag products imported to the UK.
- The unique part of the UK pork industry is that there are significant imports but still the UK is an exporter. The UK is sixth in the world on exports. They export ribs, offal, etc. products they don’t consume.
- We were in the UK to visit Genesus Genetics production facilities we have in the UK. Genesus is working with five sow units including nucleus and multiplication. We agreed to adding a six site on our visit.
- Genesus now has more purebred production in the UK than any other genetic company. Sales are not only in the UK but EU countries and Africa.
- The UK used to be home of much of the world’s major genetic companies, NPD, Newsham, Cotswolds, are no longer in business. JSR now works with Topigs. PIC which is based on the London Stock Exchange has little if any genetic nucleus in the UK. Genesus is firmly committed to growing the UK market.
- We visited the Wood’s family one of Genesus first customers in the UK. They use Genesus Jersey Red Duroc and Genesus F1 material’s. Congratulations to them being honored for being the UK’s finisher of the year.
The Wood’s have also begun to sell some of their pork directly to local people. They tell us customer satisfaction from the better taste of Genesus pork is bringing many repeat customers. It is great to see producers not only get excellent production results but producing pork that consumers want to eat. Taste matters.
The Wood’s receiving the award for UK Finisher of the Year
The UK like Europe has record prices. Last week the price was almost double the U.S. price. We expect the UK and Europe’s pork supply to fall further in the near future. The combination of high feed prices and lower supply led many import countries to look to U.S.-Canada for their pork needs. Last week’s U.S. export pork sales of 53,000 plus tonnes is the highest this market year. We expect continued increase in U.S.-Canada export sales which will push domestic hog prices higher. We need it.