Friday, September 19, 2025

Pork Commentary – July 11th, 2022

Andrew Heck
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Pork Commentary – July 11th, 2022

This week we spoke at the National Pork Industry Conference (NPIC) being held in Wisconsin. The talk was on a World Market update.

World Markets

•       Our Premise – The three major hog producing areas in the world USA, China, Europe are all cutting production at the same time. This has never happened before. 

Feed Prices

•       Feed Prices have pushed cost of production to record levels all over the world. Some relief in sight.

Contract HighsNow
CornDecember$7.66$6.07
WheatJuly$12.84$8.31
SoybeansSeptember$16.06$14.16

•       Spain 370 Euros/ton or over $10.40 a bushel, was $11.60 a bushel

•       China 3128 RMB = $12.50 a bushel, was $13.70 a bushel

Europe 

December 1
20202021# downPercentage
Breeding Pigs11,41511,004– 411– 3%
Total Pigs145,877141,516– 4,321– 3%

Europe Pork decline 5% Q1 – was 7% lower in March

Germany

•       1.48 million sows May 2022

•       Germany has declined 6.2% since December 1 (-100,000) down to 1.48 million. Down over 200,000 in the last 18 months.

•       High feed prices

•       Loss of exports due to ASF

•       New animal welfare regulations 

•       12% less pork in Q1 vs. a year ago

Spain

•       Largest producer in Europe

•       Business model – contracting unlike rest of Europe it has been the only country in Europe to expand in the past two years

•       Last ten weeks slaughter has declined year over year

•       Has the highest price on record – just over cost of production

Netherlands

•       Livestock industry under huge pressure for nitrogen pollution

•       $27 billion USD budgeted to radically reduce livestock production through farmer buyouts – voluntary to start with

Sow herd (1,000 head)
201420192021
1,1061,047910

•       Huge protests underway – some estimates sow herd will be cut by 30% -300,000 sows. Less hogs coming 

China 

•       Sow liquidation began last July – 10 months later is March-April.

China Average Hog Prices
Price per lb.35 lb. Feeder Pigs
Low was March 1885¢ lb.$59.60
Week of July 7$1.38 lb.$103.29

•       The only reason the price increased is because of less pigs. China just had its 1998.

June 1 USDA Hogs and Pigs Report
 (1,000 head)
 202020212022
Kept for Breeding6,2366,2206,168
Market71,03866,93366,356
Pigs per Litter Dec.-May11.0010.9510.97
Sows Farrowing Actual Dec-May6,3295,9645,904
June-November6,4256,0986,025

Why less Hogs?

•       Financial losses during Covid crisis

•       High feed costs

•       Difficulty to get labor 

•       High building costs – $4,000 sow farrow to wean

•       Breakeven?

•       Generational change 

USA – Demand 

•       Chicken production lower year over year with prices now $1.60 lb. a year ago $1.05 lb.

•       Beef cow liquidation and lack of Heifer retention at record combined levels. USDA projecting almost 2 billion lbs. less Beef in 2023 then 2022 (-7%). Equal to about 4 weeks of hog production.

•       Inflation – we don’t think it will cut U.S. Pork demand – consumers will cut out other items. Beef $2.60 cut-outs – Pork $1.08 cut-outs.

Fake Meat 

Beyond Meat stock (Nasdaq: BYND)

•     234.90 High in 2019

•     27.17 Last week

Market capitalization – down $15 billion from peak 

Down -$1.74 billion since January 1, 2022

Taste does matter

Gene-Edited Foods 

•       Survey by Iowa State of 2,000 U.S. residents 

•       Quote “Around 60% of the women in the survey said they would be unwilling to eat and purposely avoid gene-edited food.

Our Concern – Gene Edited Foods

•       We support technology but we need to have customers for our Pork. 

•       I.E Paylean legal product – one customer China says no. Now no Paylean. What happens when one customer says no to Gene-Edited?

Pork Exports 

•       Challenge of Euro to U.S. dollar

•       A year ago, 1.18 Euros to $1 USD – Now 1.03 Euros to $1

•       This makes U.S. pork less competitive in World Markets at an almost 15% change 

•       Year to date exports down -24%

•       Thank god for Mexico as its up 11% and the leading export country

•       China starts up most U.S. plants approved unlike Spain and Canada

Summary

•       Our premise is China, Europe and the USA the major hog producing areas with 75% of the world’s production all down at same time, probably first time in history.

•       U.S. hog prices in our opinion be at minimum the same as this past 12 months with significant upside as global pork supply craters.

Jim Long President & CEO of Genesus gives a presentation on World Markets
Spencer Long of Genesus gives a presentation on the Genesus Jersey Red Duroc
Genesus hosted reception at the 2022 NPIC
2022 NPIC opening night dinner
2022 NPIC 

USDA June 1 Hogs and Pigs Report – Fewer is Better

Andrew Heck
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USDA June 1 Hogs and Pigs Report – Fewer is Better

The USDA released its June 1 Hogs and Pigs Report last week. Our observations:

June 1
 (1,000 head)
 202020212022
Kept for Breeding6,2366,2206,168
Market71,03866,93366,356
Pigs per Litter Dec.-May11.0010.9510.97
Sows Farrowing Actual Dec-May6,3295,9645,904
June-November6,4256,0986,025

Pretty simple to see. Less sows, less market hogs, no improvement in litter size, less sows farrowing and to farrow. NO increase in production. 

June 1 Market Hogs in inventory down 4.7 million head from 2020 or about 200,000 head less a week to market next 6 months. There will be no challenge to slaughter capacity anytime soon.

With 4.7 million less pigs in inventory no wonder there are so many nurseries and finishers empty or under capacity. This is driving demand for small pigs to meet shackle commitments and help ensure fertilizer needs from manure. Currently hog manure is valued at $15-20 per head as fertilizer. What once was considered a liability is now evolving into a real asset.

Our position is that lean hogs for the next 12 months will track at minimum to last 12 months with upside. Our premise. Less sows in place. There will be no more U.S. hogs. U.S. Beef supply declining up to 2 billion lbs. next year. Pork exports will have a greater pull. Next 12 months both Europe and China will have significantly less pork production. Europe will have less to export. China will import. All factors that at a minimum will keep U.S. hog prices tracking to last 12 months. But! We expect the greater pull of pork will push prices higher than we have had in the last 12 months.

Germany 

Preliminary results from Germany’s Federal Statistics office indicates the sow liquidation in Germany continues on unabated. As of May 3, Germany had decreased from November 3, 2021 (6 months) 6.2% in its sow herd. The sow herd had decreased 9.8% since May 3, a year ago. In the last 18 months Germany’s sow herd had declined from 1.695 million to 1.480 million, a decline of over 200,000. A big number and reflection of the economic pressures of producing pigs under the cost of production triggered by ASF complications, high feed prices and new animal welfare regulations. At this point we believe Germany’s liquidation is still ongoing as pig prices continue under the cost of production.

Germany was once the largest producer in Europe. Now that is Spain. In 2015 Germany had 1.923 million sows. Now 1.480 million and still declining. Germany was once a big exporter has little pork to export in future when you consider their production compared to domestic consumption.

Feed

Stating the obvious grain is in free fall, corn dropped over 60¢ a bushel last week. Wheat declined in the $1.00 bushel range.

·      Corn December contract high $7.66 bushel – last Friday close $6.07 = decline $1.59 bushel.

·      Wheat July contract high $12.84 bushel – last Friday close $8.31 = decline $4.53 bushel.

·      Soybeans September contract high – last Friday close $14.16 = decline $1.90 bushel.

Lower feed costs are needed to have sustainable hog profitability. Not there yet but trendline is leading to “surest cure to high prices is high prices.”

China 

We have been writing since last fall that China was liquidating at massive level due to industry losses of over a $1 billion a week. We also wrote the only truth will be hog price as other data is quite suspect. Since mid-March China’s average hog price has gone up every week.

 RMB/kgU.S. Dollar lb./liveweight
March 1811.9885¢
June 2417.96$1.21
July 720.52$1.38

A huge jump in price last week of 17¢ lb. on a 270 lb. hog is $46 per head. Since mid-March an increase of $143 per head (270 lb. hog). The industry has gone from losses of about $100 per head to profits of about $50. The hogs going to market now are from September breeding’s. China’s sow herd has gotten smaller every month since then. China hog price will continue to increase. In the not-too-distant future China will be stepping into world markets for importing pork.

Summary 

U.S. has less hogs year over year. Europe has fewer hogs. China has fewer hogs. We are in unprecedented territory as the three major hog producing areas in the world are cutting production all at the same time for the first time in history. Prices have significant upside to where they are today in all areas in the coming months.

Woodlands Farm Tour

Recently Jordan Craig Service and Sales Representative for Genesus in Manitoba did a walk-through Woodlands video farm tour. Woodlands has been a Genesus commercial customer for 20+ years and uses Genesus Jersey Red Duroc sire bred to Genesus F1 dam. Woodlands was the first herd in North America to get 30+ PMSY. The video takes you through all of the Woodlands unit and shows pigs from start to finish. The presentation also highlights the data and results in Woodlands has as a Genesus customer.

Genesus – Woodlands Farm Tour link:

Pork Commentary – June 27, 2022 

Andrew Heck
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Pork Commentary – June 27, 2022 

Jim Long President-CEO Genesus Inc.
Random Observations 

Last week the U.S. Federal government filed a brief to the U.S. Supreme Court against California’s Proposition 12 a law to ban Pork from pigs that don’t meet California’s production standards. This is good news for Pork producers in our opinion. The Solicitor General of the U.S. now stands with Pork producers against California legislation. Our bet is now Prop 12 has better chance to lose in a conservative Supreme Court.

Harvest has begun in Southern Ukraine, currently wheat-barley $80 a tonne = approximately $2.60 a bushel. We expect there will be great effort to move grain to higher price markets.

U.S. Beef Cow and Heifer Slaughter
 January-May
 20212022
Heifers4,059.644,171.7
Cows1,394.911,611.2
Total5,454.555,782.9

Year to date 328,000 more Cows and Heifers to slaughter compared to a year ago. The U.S. is projecting 1.9 billion lbs. less Beef to be produced in 2023 then 2022. Certainly, would be supportive to Beef and Pork prices.

There certainly seems to be price pressure on grains and oilseeds.

 Contract HighLast Friday closeDecrease
Corn bushel – December$7.66$6.74-92¢ 
Soybean meal – October$440$389-$51
Wheat bushel – September$12.85$9.36-$3.49
Canola bushel – November$11.21$8.70-$2.51

No doubt there has been a decrease from contract highs. Lower feed prices certainly would help hog profits. We believe in most areas of the world hog production is decreasing. This will certainly cut need for ingredients in feed.

U.S. Sow Slaughter
Year to date January-May
20212022
1,333.611,261.7

A decrease year to date 72,000.

Sow herd according to USDA on March 1 was 6.098 million, a year before 6.215 million. A difference of 117,000. With a lower sow inventory, you would expect less sows being slaughtered. Let’s assume 50% animal replacement = 117,000 x 50% = 60,000 or expect 5,000 less sows slaughtered per month. January-May 5 months x 5,000 = 25,000. Our thoughts are the U.S. breeding herd is not moving significantly either up or down when we look at current sow slaughter, relative to breeding herd size and record sow mortality. Dead sows don’t get to sow slaughter.

Last week Spain the largest swine producing country in Europe reached record hog prices for this century. 1.63 Euros/kg up from a low of 1.02 Euros/kg in January (77.97¢ lb. – 52.70¢ lb. liveweight). One of the reasons prices are stronger is lower hog numbers. Prior to Easter weekly hog numbers exceeded year before. Since Easter most weeks have been lower year over year. Financial losses always end up cutting hog production. Ongoing sow liquidation throughout Europe driven by losses from record feed prices continue to cut hog numbers and push ho prices ever higher.

We have been writing for months that China was having a massive sow liquidation due to unprecedented financial losses. We also have written the truth will be in the price of pigs.

The Market Low was Week of March 18th
 National Hogs AverageFeeder 15 kg
 RMB/kgU.S./lb.RMBU.S.
March 18th11.9885¢377$59.60
June 24th17.96$1.21675$101.1

Certainly, price of hogs and feeders have increased. Market hogs up 36¢ lb. (270 lbs. x 36¢ = $97 per head). Feeder pigs up $41 per head. No one pays more than they have to. Price is up because of fewer hogs.

We expect China’s hog price will continue to increase as fewer and fewer hogs come to market due to sow herd liquidation. In the not-too-distant future we expect the higher China hog price will lead to increase pork imports supporting EU and U.S. hog prices further.

Summary

Less hogs in North America, Europe and China will continue to push hog prices. It’s unprecedented that the three major hog producing areas of the world (75% of world’s production) all have decreased output at the same time.

Confused? With this Market

Andrew Heck
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Confused? With this Market

Confused?
With this Market

We have to admit we are confused by the hog market. Cash hogs Iowa-Minnesota last Friday averaged $121.17 per lb. A reflection of what packers will pay for hogs not on contract. For lack of a better way to sum it, the National Average Lean Hog, made up of mostly contract hogs, was $1.08 lb. A big difference.

Other Observations

U.S. Pork Cut-outs closed Friday at $114.61 lb., a big jump. In the past week, almost 10¢ lb. We were with a packer last week that called the market “inverted.” They were paying in the $1.20 lb. range for Cash Hogs and Pork Cut-outs that day were $1.08. Don’t need a calculator to know that they were losing money on each cash hog they bought. This story for us is packers are still ready to pay up to get hogs in order to keep employees busy and meet sales order requirements. Hogs are short.

In the past few years having a packer contract based on percentage of the Pork Cut-out was considered excellent if it was in the 90%+ range. The last while, this formula has lagged, i.e., Pork Cut-outs mid-last week $1.08 lb. x 92% = 99¢ lb. Cash Hogs were $1.20 lb. $40 per head difference. Now Cut-outs Friday at $114.61 lb. x 92% = $1.05 lb., still below most of other market formulas. Our observation; Cut-out contracts recently have helped packers keep average cost of daily kills lower.

July Lean Hog Futures have ranged in the last three months from a high of 126.150 to a low of 97.375. A range of over $60 per head. They closed Friday at $1.11 lb. in the middle of the range. We find it hard to fathom any fundamental reason there should be such volatile gyrations. We think increasingly that Lean Hog Futures driven by hedge funds and algorithms is disconnected from the commercial hog market. When Lean Hog Futures were diving in May, the hog price held steady. We are wondering if the lean hog futures connection to the real hog market has about the same connection as show pigs to the commercial production industry. Answer of latter – not much, if any.

Most of the world’s hog production doesn’t have access to Lean Hog Futures. We aren’t sure if we are better off with the way it seems to be driven today by players with no plan or intention to produce or own pigs. As my late friend Doug Maus called Chicago, “Las Vegas with no rules.” On the flip side, lots of people like in Las Vegas, think they can beat the house.

Before and after the World Pork Expo my son Spencer and I did some traveling. In the course of our trip, we went through Michigan, Indiana, Iowa, Missouri, Kansas, Nebraska, South Dakota, Minnesota, and Wisconsin. We saw lots of corn-soybean fields. Observation: crop is in, looks good, moisture almost everywhere with heat. Current crop with moisture-heat is in good shape so far. Our industry is getting crushed with high feed costs. A big crop could certainly be helpful.

Prices last Friday

  • Beef Cut-outs Choice $2.66 lb.
  • Pork Cut-outs $1.14 lb.

Beef Cut-outs 2.3x higher than pork cut-outs. Why? Consumers will pay more for beef, obviously. It has demand. Consumers (our customers) prefer the taste of the red meat from beef, obviously. If we could move to half at $1.33 lb. it would add $40 to a carcass.

Our position has been for many years that the push to produce “The Other White Meat” was a terrible marketing plan. Beef always sold for more money and it’s red. We mistakenly as an industry chased the cheaper chicken (white meat). We then made pork too lean destroying the taste experience and once where loins and hams (half the carcass) led cut-out values they now languish, a true sign of consumers’ sentiments on these products. Also, in the quest to produce ever leaner hogs we all can see the increase and record sow mortality and wean to finish mortality as ever leaner low appetite pigs lose their robustness.

Cut-out – Friday 
Carcass Cut-out value114.61
Primal Rib192.92
Primal Belly173.11
Primal Butt145.63
Primal Loin102.86
Primal Ham98.76

Ribs, Belly, and Butt all have marbling and taste. Consumers are voting with their money what they want. Loins and Hams are obviously not meeting consumer wants and languish in price (50% of carcass). If we could produce loins and hams that could get the price of Butts, an increase of 40¢ lb. x 100 lbs. of a carcass = $40 per head increase in carcass value. Real Money. To us, it makes sense to start with consumer demand, and its obvious they will pay more for a better eating experience (ribs, bellies, butts). To us, as an industry, we should be producing what the consumer is looking for. It’s what all good marketing companies do. Produce to demand.

Summary 

The U.S. Hog Price and Pork Cut-outs showing further strength. U.S. hogs are trading over $1.20 lb. We expect the sow liquidation in Europe and China will lead to the three major pork-producing blocks in the world having less production in the coming months. This will lead to higher hog prices than future markets indicate.

Exploring genetic selection for feed efficiency

Andrew Heck
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Exploring genetic selection for feed efficiency

By Argenis Rodas-Gonzalez

Editor’s note: Argenis Rodas-Gonzalez is an associate professor in the Department of Animal Science at the University of Manitoba. He can be contacted at argenis.rodasgonzalez@umanitoba.ca.

Topigs Norsvin Canada boars at a Manitoba facility being prepared for manure sampling to measure feed efficiency.

Profitable, cost-effective swine production requires healthy animals, higher performance, increased feed efficiency and making the best use of available nutrients.

Feed efficiency can be described as the biological basis of how pigs consume and metabolize feed to grow and produce an edible product. This is a complex trait based on a pig’s ability to store and use nutrients from feed, such as fats, carbohydrates, and proteins. Skeletal muscle plays a significant role in using and storing those nutrients. Most of the efforts to improve feed efficiency have been focused on formulating balanced diets through investigating nutrient composition and genetic selection for carcass leanness.

Feed efficiency can be expressed as a feed conversion ratio (FCR), which is defined as feed intake over body weight gain. A low-FCR value means animals consume less feed per unit of gained body weight, making them highly efficient; in contrast, a high-FCR value means animals consume more feed per unit of gained body weight, making them less efficient. There are other expressions of feed efficiency, such as residual feed intake and lean feed conversion, but these will depend on additional knowledge required for informed decision-making.

Feed efficiency factors vary

Manure samples were analyzed to determine nutrient digestibility.

A common approach to improve feed efficiency is to supply appropriate nutrient requirements for animals; however, the improvement could be limited and depends on the ingredient composition of the feed, which can vary in nutrient digestibility.

On the other hand, purebred pigs are selected for feed efficiency at the nucleus level, and genetic selection to improve feed uptake continues to be a challenge. At Topigs Norsvin, selecting genetics based on the estimated breeding values for a given feed conversion ratio (EBV-FCR) has proven to be an effective strategy to maximize feed efficiency and improve growth performance and carcass composition. However, it is not clear if nutrient digestibility in pigs could be altered by genetic selection for feed efficiency.

Studies have shown that diverse feed efficiency groups resulted in lines of pigs showing both differences in growth performance and digestibility of nutrients, which happens in the gut.

For example, in Yorkshire breeding lines fed with high-energy diets, the digestibility of dry matter, total energy, absorption of nitrogen and other nutrients like fibre are similar in both high- and low-efficiency groups, based on residual feed intake (RFI) values. But when these groups are fed with low-energy diets, the high-efficiency group has greater digestibility of dry matter, total energy, nitrogen and fibre compared to the low-efficiency group; however, low-energy diets reduce growth performance of both efficiency groups.

In contrast, other studies have reported no differences in digestibility among divergent feed efficiency pigs, despite high-efficiency pigs presenting a faster growth and leaner carcasses. Thus, based on some contradictory results, uncertainty exists with selection for feed efficiency and its effect on growth performance, nutrient digestibility and carcass characteristics, especially within Large White lines.

Overcoming the feed efficiency dilemma

CT scanning was used to determine in-vivo carcass traits.

My team at the University of Manitoba includes researchers Ethendhar Rajendiran, Gustavo Mejicanos, Laura Beens and Ankita Saikia from the Department of Animal Science. We are working in collaboration with Topigs Norsvin Canada to respond to certain feed efficiency questions that have stumped breeders.

Our project is funded by Topigs Norsvin Canada, the Canadian Agricultural Partnership and the Ag Action Manitoba Research and Innovation program. The investigation is planning to evaluate 2,000 genotyped boars from two Large White dam and sire lines separated into low- and high-feed-efficiency groups based on EBV-FCR values within the breeding line.

This study investigates the variation in growth performance, apparent total tract nutrient digestibility (ATTD) and in-vivo carcass traits in finisher boars selected for low or high feed efficiency. Digestibility is determined by testing manure nutrient levels using an indigestible marker, while in-vivo carcass traits refer to the lean yield of the whole pig, determined using Computer Tomography (CT) scanning. Boars are selected at 23 weeks of age based on their feed efficiency value and fed a mixed corn-soybean meal-based diet using feeding stations that record individual feed intake and body weights.

Preliminary findings indicate that the sire line was heavier, with a final weight of more than 9.69 kilograms, growing more rapidly and more efficiently than the dam line, gaining more than 130.69 grams per day with a feed conversion ratio of less than 190 grams of feed consumed to gain one kilogram of body weight.

In addition, sire line presented greater loin depth, at more than 6.92 millimetres, and thinner fat depth, at less than 2.60 millimetres. However, there was no significant difference in nutrient digestibility between lines. On the other hand, regardless of the genetic line, and compared to the low-efficiency pigs, the high-efficiency pigs consumed less feed, at less than 284.97 grams per day, were more efficient, with a feed conversion ratio of less than 260 grams of feed consumed to gain one kilogram of carcass weight, had thinner fat depth at less than 3.05 millimetres, along with greater loin depth more than 6.92 millimetres compared to low-efficiency pigs.

The high-efficiency pigs were better able to digest crude protein and tended to show higher phosphorus and calcium digestibility compared to low-efficiency pigs. Based on the estimated protein deposition and the average feed intake one week before sampling, the amount of digestible lysine content met the requirements for the average pig. Nevertheless, high-efficiency pigs had a reduced feed intake, implying that they might have experienced a shortage of lysine in the diet. Thus, high-efficiency pigs offer favourable growth performance, heavier and leaner carcasses. However, it is still unclear whether the improved digestibility of crude protein was due to a lysine shortage or differences in genetic merit for feed efficiency.

Forward thinking for progressing efficiency

The University of Manitoba and Topigs Norsvin are also exploring the pig gut microbiome to identify the favorable microorganisms that contribute to feed digestibility, along with determining feed digestibility by using near infrared spectroscopy, and in-vivo leanness by CT scan. The findings may allow us to better understand the relationship between the gut microbiome, nutrient digestibility and genetics, leading to the improved and more effective selection of pigs for breeding programs.

World Pork Expo Report

Andrew Heck
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World Pork Expo Report

Last week we attended the World Pork Expo held at the Iowa State Fairgrounds in Des Moines, Iowa. Our observations:

The World Pork Expo this year appeared to us to have more visitors than the year before. Main reason, less Covid related issues including the ability of people from other countries i.e., Canada, Mexico, South America, Europe, and parts of Asia able to travel again. We would observe less people than prior to canceled World Pork Expo’s one year for African Swine Fever fears and another year due to Covid. One other reason for less people is the show pigs are not at World Pork Expo anymore. The removal of thousands of show pigs from the premises is an obvious benefit to limiting the chance of swine disease exposure.

The attitude of producers we talked to was continuous optimism. Hog price is good but feed price is driving cost of production to levels that limit current and future profitability.

Driving through Iowa – Illinois before and after the Expo, it appears to us corn – soybeans look good, with most areas having lots of moisture and warm temperatures. Good scenario for corn-soybean development.

One producer spoke to us about a feeder pig broker saying that the number of empty finishers was because producers won’t buy pigs because of feed costs. Our reply is all pigs are in barns, none are being put in fields. If barns are empty, it means not enough pigs around to fill them. No one has barns to sit empty as a business model.

Most of any new sow barn construction discussion is being driven by Vet – Management clinics looking to manage and sell products to sow barn ownership. Very few new sow barns are being built or contemplated by other type of production models. New sow barns (farrow to wean) now at $4,000 per sow. Our observation is that the U.S. sow herd is not moving higher.

For every new sow unit there is someone exiting with the same number of sows. We also do not believe there has ever been expansion where there have been high feed prices.

To reiterate, high feed prices are hanging over the industry. This cannot be explained enough.

At World Pork Expo, Genesus announced the new World Mega ProducerTM list. There were interesting conversations, mostly centered on the huge drop of over 1 million sows of three major China World Mega ProducersTM. Producers historically don’t decrease swine production capacity when they are making money. China has been losing big money.

2022 World Mega Producer TM List 

We have discussed many times our observations that our industry has record sow and wean to finish mortality. In discussions with producers at the Expo, frustrations with this reality were evident. We believe the increase in mortality is caused by genetic companies ignoring the benefit of high appetite and structurally selection as they continue to minimize robustness. We see few other reasons for average sow mortalities almost doubling and wean to finish spiking.

The mortality increases have created opportunities for companies to deal with deadstock. Below is a picture of the massive Biovator Pig Composter. It has been said one person’s adversity is another’s opportunity. We believe best to have pigs that live.

Talking to Packers at the Expo, they are not having a good time. It’s not hard to calculate issue. Hog Price average $1.07, Pork cut-outs $1.09 lb. The Hog Price this close to Pork Price isn’t good positive packer gross margins.

Inflation discussion was not only centered on feed costs but also on fuel costs, labor costs, and interest rates, all factors increasing costs for producers and packers. We need to have more money for our hogs and pork.

We want to thank all those that visited the Genesus exhibit and the producers that stopped to chat and enjoyed the Genesus pork sired by our Jersey Red Duroc. Also, it was nice to hear the thanks for our fight for the CFAP 1 top-up. The millions and millions of dollars promised but not delivered to a contracting swine industry is sad. The same promise re CFAP 1 top-up was made to corn producers and paid in billions. Corn got it paid, and we know what the corn price is. Hog industry contracted in production is a reflection of the economic damage from Covid. It wasn’t fair. Unfortunately, we believe NPPC didn’t fight for producers to get the promised CFAP 1 top-up to producers. That’s their job, and they failed us in our opinion and also the opinion of producers that visited us last week.

The good news is that NPPC executives had a retirement party in Des Moines last week (I wasn’t invited). They leave with a legacy of failing to fight for the millions promised by the government. The even better news is a new NPPC team is being put in place. I do not know Mr. Humphreys, the new CEO of NPPC, but I have been told he has the energy and ability to put NPPC on a path to be a fierce advocate for producers once again. Not one focused on bureaucracy sustainability. Hope spring’s eternal as hog producers. We hope for the NPPC to once again remember their job is to fight for producers each and every day.

Genesus team present at the 2022 World Pork Expo
Inside the Genesus tent at the 2022 World Pork Expo

Pigs fed E. coli antibodies could lead to safer pork

Andrew Heck
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Pigs fed E. coli antibodies could lead to safer pork

By Lexie Reed

Editor’s note: Lexie Reed holds a Doctor of Veterinary Medicine from Ontario Veterinary College. She can be contacted at lexiereedvm@gmail.com.

Proper cooking of all meat, including pork, helps prevent foodborne illness. Now, scientists are finding ways to address the problem well before the consumer ever takes a bite.

Pork-associated human illnesses have drawn unfavourable media attention to the swine industry over the years. In 2018, a pork recall was issued by the Canadian Food Inspection Agency (CFIA) in response to an outbreak linked to an Alberta restaurant. The pathogen responsible for the death of one individual and more than 40 cases of illness was Escherichia coli (E. coli) O157:H7.

As few serious E. coli illnesses have been associated with pork products, there was skepticism that contamination from cattle in the abattoir was truly to blame for the outbreak. However, a 2020 study found that O157:H7 bacteria reside within the intestinal tract of pigs, and though risk of E. coli illness from pork products is low, it can have serious consequences.

Fecal contamination of hog carcasses is a serious risk factor for foodborne illness from pork. For these reasons, cooking pork thoroughly is recommended to kill any bacteria that may be present on the meat. Hygienic removal of the intestines post-slaughter, to prevent the spillage of intestinal contents onto the saleable carcass, is another important step.

But what if there was another layer to the pork safety net?

The need for E. coli antibodies

E. coli O157:H7 is known to exist in cattle, often transmitted at feedlots. But for a long time, no-one suspected pigs, too, could be affected.

A 2017 study of provincially licensed abattoirs in Alberta found that 1.8 per cent of carcasses sampled were contaminated with O157:H7, several of which were subtypes of O157:H7 that are of importance to human health. Samples were taken from abattoirs that slaughtered both pigs and cattle and from abattoirs that slaughtered pigs only. No difference in the prevalence of O157:H7 carcass contamination was observed between abattoirs that slaughtered just pigs or pigs and cattle, indicating that O157:H7 contamination of hog carcasses is a result of the pathogen occurring within the pigs themselves.

O157:H7 antibody technology was originally proposed for development in cattle, as O157:H7 contamination is predominantly associated with ruminants. However, the efficacy and safety studies in mice are more applicable to monogastric species, and thus the development in pigs was pursued. Success in monogastric studies may still lead to the development of direct-fed O157:H7 antibodies to cattle.

Developing an E. coli antibody to feed pigs

Nicotiana benthamiana, the plants in which the O157:H7 antibodies are produced, are shown here in a research greenhouse.

Agriculture and Agri-Food Canada (AAFC) research scientists have recently isolated an E. coli antibody that could neutralize O157:H7. The antibody is synthesized within the plant Nicotiana benthamiana and could be delivered as an edible feed material. Once ingested, the antibodies would bind and neutralize O157:H7 present in the gastrointestinal tract.

Rima Menassa is a genomics and biotechnology research scientist at AAFC’s London Research and Development Centre. She conducted the study that found the antibodies to be effective at neutralizing O157:H7 in cell cultures. Presently, Patti Kiser of Western University is conducting a study to determine if the direct-fed antibody can neutralize O157:H7 in mice, which would bring the technology one step closer to proof of concept in livestock.

“If feeding the antibody to mice who already have O157:H7 established in their intestines prevents shedding of the pathogen, then antibody feeding short-term prior to slaughter could be an option in pigs,” said Menassa. “If, however, the antibodies only prevent O157:H7 from colonizing the intestinal tract when it is introduced to naïve mice, then it is more likely that the antibodies would need to be fed from an early age, before significant O157:H7 exposure.”

If successful, the outcome of the study could lead to commercialization of the technology. Preventing E. coli from colonizing the gastrointestinal tract or reducing shedding of the pathogen would reduce the risk of O157:H7 contaminating the carcass at time of processing. Further, this technology could reduce the risk of contaminated manure, which may be spread on crop fields as fertilizer.

The plant used to produce the antibody, Nicotiana benthamiana, is a plant related to tobacco, native to Australia. It is commonly used for molecular biology studies and has been used to produce vaccines and other pharmaceutical products, thanks to its natural ability to express foreign gene sequences.

Although the dose regime has not yet been established, it is unlikely that the amount fed of the plant material would contribute any appreciable nutritional or fibre content. The current study in mice will explore both efficacy and safety of the plant-encapsulated antibodies. The results of this study will also help to establish a timeline for feeding pigs pre-slaughter. This study is a collaboration between AAFC and PlantForm Corp., a start-up plant biotechnology company based in Guelph, Ontario.

Direct-fed antibodies have a future

The development of oral antibody technology for E. coli may have implications for the prevention of other pork-associated infections as time goes on.

Though still in its infancy, direct-fed antibody technology is on the horizon. The commercialization of this technology for O157:H7 could expand to other significant zoonotic pathogenic bacteria in pigs, providing abattoirs with another mechanism to reduce foodborne illness from pork that starts before the pigs even reach the packing plant.

Even beyond a food safety application, this pharmaceutical delivery system could create a new avenue for vaccine and antibody delivery through feed, particularly at a time when barn labour is a significant challenge for many producers.

Whether or not an E. coli O157:H7 antibody for pigs is embraced as a method for preventing foodborne illness from pork, the development of a novel delivery method for antibodies could be a breakthrough product for the swine industry.

Study reveals more about PED in manure

Andrew Heck
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Study reveals more about PED in manure

By Andrew Heck

Newborn piglets are especially vulnerable to PED. The virus can be detected in manure using polymerase chain reaction (PCR) testing, but other transmission risks still exist even when manure is not the culprit for the disease.

When porcine epidemic diarrhea (PED) broke for the first time ever in Alberta, in 2019, the province’s fears of its inevitable spread were confirmed. What was not clear – as in many disease outbreak investigations – is the source of how it arrived on-farm.

“Our disease surveillance program regularly tests for PED, among other viruses of concern,” said Javier Bahamon, Quality Assurance and Production Manager, Alberta Pork. “Before the outbreaks, and since, thousands upon thousands of tests have come back negative, which is a positive sign for our industry.”

Despite surveillance, and despite a lengthy investigation, Alberta’s four PED cases from 2019 remain a minor mystery. Could it have been a contaminated feed ingredient? Poor truck washing? An unintentional lapse in biosecurity? We may never know for sure, but we do know the virus can be present in manure. Is that manure capable of causing the virus to shed in piglets?

With PED flaring up in other parts of Canada, and as farmers turn to spreading manure on their crop fields as a way to offset high fertilizer prices, this question has become important to answer. Thanks to support from Swine Innovation Porc (SIP), Results Driven Agriculture Research (RDAR) and provincial funding partners, researchers at the University of Saskatchewan’s Vaccine and Infectious Disease Organization (VIDO) – led by Qiang Liu and supported by Colette Wheler, Trina Racine and Mingmin Liao – began looking for clues last year, and their findings are now helping to better inform Canada’s PED response.

Simulating barn conditions, for testing

Fecal and clinical scores for the piglets involved in the trial

The concern over manure stems from the idea that piglets are highly exposed to manure in the barn, and some of that is ingested. Additionally, when it comes to applying manure to fields, equipment used in the process can be considered fomites – transmission pathways – for the virus.

To find out if it is possible for piglets to shed PED virus after ingesting contaminated manure, three groups of newborn piglets were fed highly concentrated lagoon materials containing RNA of PED virus – a simplified genetic component – which was collected from infected lagoons by representatives from Alberta Pork and Alberta Agriculture, Forestry and Rural Economic Development. For this specific case study, the lagoon materials were necessarily gathered six-and-a-half months following the initial PED outbreaks in Alberta, which may have impacted results.

Using three commercially available pregnant sows from Prairie Swine Centre in Saskatoon, piglets were farrowed and immediately brought into the study. After being fed the lagoon materials, the piglets were observed for diarrhea and mortality over the course of a week, which could potentially indicate PED infection. For a deeper dive, fecal swabs were collected for daily analysis.

Following the trial, none of the piglets showed any abnormal clinical signs, though there was mild diarrhea observed in a few piglets. Diarrhea consistency trended toward the lower end of fecal scoring – toward “soft, pasty like toothpaste, sticks to swabs” – which would not be the case in the event of PED infection, where diarrhea should be seen at the higher, more severe end.

The mild diarrhea was gone after a couple of days, and the piglets completely recovered. Body weight gains were similar among piglets having diarrhea and piglets without diarrhea, further indicating that the diarrhea was not the result of PED but some other factor. Fecal swabs failed to yield any of the virus RNA at a detectable level as well.

In this specific case study, under the conditions in which the lagoon materials were gathered, the researchers concluded that the exposure of these animals to the infected material failed to produce infectivity or clinical signs of PED in the animals themselves. Other factors, it seems, are likely responsible for Alberta’s cases of PED in 2019.

Study results are positive, with caution

While the study’s supporters are pleased to have gained further insight into PED’s lack of infectivity in manure, with consideration given to the time period in which the study took place after the initial outbreaks, the important take-home message for producers is not to rest on their laurels when it comes to proper practices.

“We are happy with what the study’s findings, as this study provides a reference when dealing with contaminated manure,” said Bahamon. “However, producers are always advised to be vigilant when it comes to using manure from their operations, since there are still so many more unknowns out there, and we do not want to give anyone a false sense of security, especially in places where PED is an active problem.”

Given the limitations of the study, it cannot be absolutely confirmed that PED virus shedding in piglets is impossible when exposed to contaminated manure. Key factors include the length of time following an outbreak and the number of outbreaks in any given geographic area. These must be taken into account when it comes to evaluating the risk of spreading the disease, and a different level of risk may be observed when dealing with certain cases when other concerns come into play.

As the industry’s understanding of PED continues to improve, mitigating risks, the threat posed by PED remains ever-present. With time and further investigation, the hope is that the industry can further adapt to the realities of this virus, for the benefit of healthy hog production.

U.S. Hog Price Creeps Higher

Andrew Heck
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U.S. Hog Price Creeps Higher

The U.S. hog price continues to creep higher with the Weekly National Price reaching over $1.10 lb., now higher than the same time a year ago. It was about this time last year when the price made its move to beyond $1.20. The highest net lot on last Friday’s National Daily Direct was $1.25 lb. The lowest 72¢ lb. Quite the spread.

Spain

Spain is the third-largest hog-producing country in the world. It is the major producer in the European Union. An update.

Spain’s hog price currently is 1.549 Euro/kg (75¢ lb.) touching the highest price in its history.

We understand last year Spain averaged about 1.09 million market hogs a week. Currently, Spain is averaging about 880,000. A decrease of 20% (210,000 less market hogs a week). One of the reasons for the decline is a massive PRRS outbreak from a strain called Rosalia which is very active in the major hog-producing areas of Catalonia and Aragon, areas of what can be described as wall-to-wall hog barns. Nursery-Finishing losses are in the 30-35% range with sow mortality over 20%. One major slaughter company has gone from 80,000 heads a week last December to 47,000 a week recently.

Another reason is the decline in purchases of small pigs and market hogs from other parts of Europe. High pig mortality and high feed costs increasing the cost of production is a major deterrent for importing pigs.

Spain imports 80% plus of its feed ingredients. Since September 2021 feed costs have gone from 260 Euros/ton to 450 Euros/ton, increasing cost of production to about 60 Euros a market hog ($70).

Financial losses in Spain had also cut production base with the sow herd declining as capital losses have encouraged liquidation. Some speculate even fewer hogs a week in the near future. Less Pork in Spain means less for export. This is supportive for domestic and international markets. The only way to ration limited supply is higher prices. We need only to look at grain markets to understand that reality.

Other Observations

Liquidation of Europe’s sow herd continues despite near-record hog prices, as high feed prices increase breakeven beyond current market prices. Some speculate that Germany due to ASF consequences, animal welfare, environmental regulations, generational change, and continual financial losses (high feed price) will decrease another 300,000 sows. A big decline that coupled with other liquidations will decrease the EU’s total pork production capacity down to domestic equilibrium supply-demand.

At one point Beyond Meat (Poster Boy Company for fake meat) had a share value of $234.90 per share. Last week it was $28.63 per share. A loss in market cap of $11 billion. In the last year sales of all plant-based meat have fallen in volume. We are so sad.

Next week we will unveil the World Mega Producer list for 2022. One of the companies on the list is China’s Zhengbang Group from China. Towards the end of 2021 Zhengbang Group had 1,000,000 sows. It’s a public company listed on the China Stock Exchange. Recently Zhengbang announced they now have 380,000 sows, a decline since the end of 2021 of over 620,000 sows. A huge reduction, and in our opinion, a result of the reality of massive losses per head encountered by most in China’s swine industry. Zhengbang had over $1 billion in losses.

We continue to believe that China’s hog industry has had massive sow liquidation starting last summer. China’s hog price has jumped over 20% since April 1st. In the not-too-distant future, we expect not only continued increasing China’s hog prices but China increasing pork imports to fill their inevitable pork deficit.

High feed prices are impacting global livestock and poultry production. We expect a global decrease due to the financial losses. Lots is being written about a global food shortage that could lead to not only malnutrition but social and political problems.

A quote from The Economist magazine on May 19th, “Gro Intelligence, a data firm, calculates that the calories diverted by current biofuel production and new commitments could soon be equivalent to the yearly needs of 1.9bn people. Biofuel production has increased markedly in America, Brazil and Europe as the oil price has risen; expensive crude makes the sector more profitable. Repealing biofuel mandates could lessen the damage.”

Some good news re Brazil. The country’s grain production is expected to reach 271.8 million tons from 2021/22, an increase of 6.4% over the previous year. Corn crop of 116.9 million tons up 33.4% from the year before, was significantly helped by good weather in the second-crop corn. More corn is good for the livestock industry.

Summary

Tough time for most swine producers in the world. It’s attrition to see who survives. When the dust settles, we will have the highest prices in history. If the situation in Ukraine gets tempered the price decline in world grain markets would lead to a time of good profits for surviving producers.

Road Trip Continue Ireland

Andrew Heck
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Road Trip Continue Ireland

Last week we continued our road trip going to Ireland. We have never been there before. Beautiful country.

Our Observations

Like the rest of Europe and the UK, Ireland producers have suffered from high feed prices relative to hog prices. Hog prices are at record levels but with the current feed prices producers still lose up to £35 ($40 U.S.) a market hog.

The sow herd is estimated to have liquidated by 10-15% with liquidation still ongoing. Similar to most countries across Europe.

Unlike England where half the sows are outside, Ireland’s production is all indoor confinement.

Much of Ireland’s pork is sent to England for consumption.

Ireland, like other countries, is seeing an increase in sow mortality attrition. It’s amazing to see sow removal rates as high as we did. It is a reason Genesus is gaining market share in these markets. Most producers realize dead sows don’t have pigs.

In Ireland, we visited Glenmarshal Sires owned by Trevor Shields. Genesus has worked with Glenmarshal for seven years. We have an excellent relationship with Trevor and his team. Over the seven years, our joint customers have grown from zero to a significant percentage of the market. Glenmarshal is Genesus’ exclusive supplier in Ireland and sends weekly shipments to England, Scotland, and other countries. Pigs that live and pigs that grow are a big reason for Genesus’ growth.

Producers utilizing Genesus recommended rations are benefiting from better income over feed costs. One of the biggest challenges Genesus has been convincing nutritionists that we can feed such a low-cost ton of feed. The confirmation research analysis from the world-renowned Kansas State University Nutrition team is helping us turn the tide. It only makes sense for us to recommend rations that maximize customers’ financial results.

On our trip, we visited with packers and processors. The challenge for all is the eating experience for the consumers. A heavy emphasis on low backfat has pushed packer marbling levels below 2. This type of product is not what drives consumer eating satisfaction. Genesus has 3.8 marbling, a huge difference and one that packers – retailers can get benefits to fix this taste – flavor problem.

Genesus now has more nucleus – multiplication in Great Britain than PIC. Interesting as PIC started in Great Britain and is a listed company on the London Stock Exchange. No doubt PIC is the biggest swine genetic company in the world. It dwarfs the others including Genesus. It’s been a tough year for Genus plc much like the margin in the hog industry their share value decreasing from a high of 6,310.00 to 2,684.00 shedding about $2 billion in value. We expect it can’t be much fun for Executives who have to justify the huge loss in stock value to the many different institutional shareholders. Big difference between the institutional shareholders of PIC to Genesus where we are pig farmers working to make a better pig. We know what washing farrowing room takes and we know it’s best not to have sows with prolapses.

Other Observations

U.S. Pork Exports reached the highest week of the year at 31,300 Mt. We expect to see better export numbers as Europe’s hog price has increased and supply is dropping which is helping U.S. export markets.

USDA May Quarterly Annual Product predictions came out last week. For Beef 2022 27842 million lbs., 2023 25950 million lbs. A decrease predicted of 1.9 billion lbs., less Beef in 2023. A decrease of major proportion. Around 7%. USDA predicts a small increase in pork production in 2023 from 2022 of 300 million lbs. We would be surprised right now if pork production increases. The Beef decrease would be hugely supportive to Pork prices in 2023.

June Lean Hogs got down to 97¢ recently. Recovered now to $1.10 lb., cash has held. Iowa-S. Minnesota $1.13 lb. We expect $1.20 plus.

We have written we expect China’s hog liquidation which started last July would begin to show up with less hogs coming to market in the second quarter. We believe the only indicator of the reality will be China hog prices.

China Prices in U.S. Dollars Converted from RMB
 National Market Hog Price7 kg pigs15 kg pigs
Week of April 189¢ lb.$61$65
Week of May 20$1.08 lb.$81$84

Certainly increasing so far in the second quarter. We expect as fewer and fewer hogs come to market prices will continue to increase. Price is the truth.

Summary 

Our Trip to Great Britain and meeting with Europeans at the British Pig and Poultry Fair reinforced our belief that Europe’s hog production has begun to decrease and will continue to. Increasing prices in China tell us the liquidation of sows is leading to fewer hogs. We know by all statistics there are fewer pigs in the U.S. As weeks go by the combined pig production of the Big 3 with over 75% of the world’s production in China, Europe and USA will continue to decrease. Price is the only way to ration supply. Prices will break all previous records; the challenge is the daunting price of feed.

In front of Glenmarshal Sires AI Stud. From left to right: Peter Stenka of Glenmarshal and William Healy, Glenmarshal International Manager; Paul Anderson and Simon Grey of Genesus; Trevor Shields, Owner of Glenmarshal; Glenmarshal AI Station Manager, Lynne Flynn; and Jim Long of Genesus.
From left to right: Paul Anderson, Simon Grey, Spencer Long, and Jim Long of Genesus at the Guinness Brewery in Dublin, Ireland. Fantastic tour, still don’t like Guinness.

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Alberta Pork
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