Pork Commentary, October 18th, 2021 Jim Long, President-CEO, Genesus Inc.
As our readers know, we spent a couple weeks in Spain, the world’s third-largest sow herd country. At the time we wrote about the big drop in hog prices and thought major herd liquidation was ongoing in Northern Europe – Germany, the Netherlands, Belgium, maybe Denmark – Poland. This past week we looked at the markets in Northern Europe now. We have data on prices for the last six years.
Last week Cull Sows 0.50 Euro/kg – lowest in six years (27¢ U.S. lb.)
Last week 25 kg feeder pig – 20 Euros – lowest in six years (55 lb. pig – $24 U.S.).
Last week’s Market Hogs – .0.90 Euro/kg live – matching low of six years.
In Spain, we were told cost of production farrow to finish was 1.18 – 1.22 Euro/kg. Using 1.20 Euros/kg average (64¢ U.S. liveweight a lb.), if breakeven 1.20 Euros and market price 0.90 the loss is 0.30 a kg – .30 x 125 kg market hog = 37.5 Euros loss per head ($45 U.S.).
One guarantee in the hog business is when producers lose money you end up with less hogs after the herd liquidation. Our synopsis, Euro sow price lowest in six years means lots of sows and packers only pay what they have too. Feeder pig price lowest in six years indicates lack of demand and the price finishers figure they can pay to at least break even. Current Market Hog price of 0.90 Euro/kg way below breakeven, losses will be mounting that’s why sow price is low, liquidation.
China
Meanwhile in China sow herd liquidation continues. We are told the sow price in some areas 2 RMB/kg (15¢ U.S. lb.). They are worth almost nothing. A sign of abundant sows coming to market. Why the liquidation? China’s breakeven estimated to be 21 RMB/kg, the current market price 11 RMB/kg. The loss is 10 RMB/kg (-72¢ lb.) multipled 120 kg hog = loss 1200 RMB per head (264 lb. hog, losing $190 U.S. per head!). It’s hard to believe per head losses of $190 U.S. but that’s the arithmetic.
Consequences:
Producers run out of cash – can’t buy feed – ship all hogs – sows – plus everything else.
A major global animal health company told us they are no longer going to ship any products to China – didn’t get paid and are afraid they won’t, ever.
Biosecurity – health monitoring becomes nonexistent triggering even more ASF, PRRS, and PED breaks.
One of the publicly-owned stock market World Mega Producer reported loss of $500 million U.S. first half of the year. This year first six months average price of hogs in China about 22 RMB/kg. How’s it working at 11 RMB – $200 a head loss?
Since January the stock market value of the listed swine genetic companies has declined over $70 billion. Lots of people and businesses out lots and lots of money. $70 billion would have bought the whole U.S. hog industry.
The losses in China per head are the highest ever experienced anywhere at any time. It’s uncharted water, the latest data we saw was China marketing 13 million hogs a week. Farmer Arithmetic 13 million at $190 U.S. per head loss is an industry going backward just about $2.5 billion a week. Maybe too high but take a billion off and it’s still almost incomprehensible. The one guarantee in the hog industry when producers lose money sows get liquidated. When producers lose lots of money lots of sows get liquidated. China losing lots of money.
2022
In 2022 we see fewer hogs in Europe and China. In USA the USDA inventory indicates 6% fewer hogs beginning 2022. The USDA September 1 inventory report had 2.318 million fewer pigs under 120 lbs. than a year before. If we use 16 weeks to get from birth to 120 lbs. 2.318 million that’s 145,000 less hogs per week. A big number.
Summary 2022
Europe will end up with less hogs compared to 2021.
China will end up with less hogs compared to 2021.
USA will end up with less hogs compared to 2021
Every major producer is declining.
Our thought is price will rebound with vengeance as Global supply declines in 2022. Lean Hog futures USA currently undervalued. The dog is going to hit the end of the chain. It’s not if but when.
The Fall 2021 edition of the Canadian Hog Journal is here!
It is a tale as old as time: man versus beast. As the war on wild boar rages on in North America, learn about how the issue is being approached by different jurisdictions, and head into the field with a pair of boar trappers to learn about eradication efforts.
Feed cost management strategies are becoming more and more popular as feed prices remain high, availability remains low, and as hog prices gradually decline approaching the fall. Find out how you can protect your operation from unnecessary losses.
Public trust matters in agriculture, and, for consumers, farmers are the most important representatives of the industry. Consider why we all need to work together to improve our image by sharing the good news of your work.
In an increasingly plant-based world, pork still plays an integral role in the diets of Canadians. Look past the simulated meat hype and see why the real deal is still wanted and needed.
In research, creep feeding and canola extrusion are getting a closer look, and feeding peas could be a step in the right direction for lowering the carbon footprint of hog production.
As COVID-19 restrictions ebb and flow with case counts in each province, my home, Alberta, has imposed new guidelines for in-person gatherings, including a vaccine passport system. These kinds of spur-of-the-moment changes from government have complicated event planning in our industry, leading to cancellations or postponements in some cases and a shift to online formats in others.
The Alberta Livestock Expo in Lethbridge will not take place this year, unfortunately, but I was originally hoping to share this magazine – hot off the press – with producers and stakeholders at that event. Also in Alberta, the Red Deer Swine Technology Workshop has gone virtual for the first time, after being cancelled last year, and you can read about that in our next edition.
Coverage of this year’s Porc Show – virtual for the second time – will appear in the next edition of the Canadian Hog Journal, and coverage of the upcoming Banff Pork Seminar – back in-person, as of now – will be featured in the special edition after that, as always.
Hopefully soon (and I really do mean soon!), I can make my way across the province and country again to broaden my horizons and keep in touch with so many of our great readers and others in the industry.
Even if we cannot connect face-to-face, share your ideas with me by emailing andrew.heck@albertapork.com. There is a vast amount of experience and wisdom out there waiting to be broadcasted. Let me know what is on your mind!
Editor’s note: Cam Dahl is the General Manager of Manitoba Pork. He can be contacted at cdahl@manitobapork.com.
The Canadian Centre for Food Integrity (CCFI) considers public trust a ‘roadmap for success.’ Farmers need to buy in to telling their story to preserve consumer confidence at home and abroad.
I find that many farmers react to the words ‘public trust’ like a cat running across hot pavement. The subject is often viewed as a threat, seen by some as rhetorical cover for those who want to dismantle modern agriculture.
While I understand the reaction, I have a different response. I see public questions on food production as an opportunity. Addressing consumers’ questions will help enhance the connection and relationship between farmers and the public. This will also differentiate Canada’s farmers – and the food they produce – in both domestic and international markets. It is a key tool to secure sustainable and long-term consumer demand.
Until relatively recently, Canadian agriculture did not have to consider questions from consumers on how their food is produced. Governments established food safety standards, registered farm input products and set environmental regulations. This provided the assurances that consumers were seeking – at least most of them. That has changed. Nowadays, farmers, processors and everyone involved in supporting agriculture production is required to actively engage in telling the story of modern farming.
Answering questions about the origins of food is not a fad that will be gone tomorrow like the latest internet diet. The growing focus by many consumers on food production practices is a true trend that agriculture needs to be ready to meet head-on. Consumer interest will only continue to grow for years to come.
Rather than responding to questions from consumers with skepticism, farmers can embrace them with optimism. That is because, when it comes to tending to the environment in a sustainable way, and caring for animals humanely, our farmers are world leaders.
We need to do a much better job of telling the good news story of modern agriculture. Decades of land and water stewardship have proven that farming can be considered the oldest ‘green job’ in many jurisdictions, which is certainly true for Manitoba. For example, pork producers create more food today with less environmental impact than even 10 or 20 years ago.
Over the last 50 years, hog farms have significantly reduced their carbon footprint. Manure that was once thought of as a waste product is now viewed as a valuable organic nutrient. Using new technology, farmers inject manure below the soil so that it is efficiently taken up by crops. The modern practices that have made environmental gains possible are the result of years of investment by farmers, governments and industry.
The same progress has been made in ensuring animals are raised in appropriate housing, that they receive well-balanced and nutritious feed, that diseases are prevented where possible and judiciously treated when not, and that hogs are handled humanely at all stages of their lives. Animal welfare is assured through a combination of rigorous provincial animal welfare regulations and industry standards.
An important component of the standard for animal care is the science-based National Farm Animal Care Council (NFACC) Code of Practice for the Care and Handling of Pigs that all Canadian hog farmers are required to follow. The code is backed up by requirements for engagement with a veterinarian, including on-site visits. Adherence to the code is supported by audits, and farmers cannot deliver to federally inspected processing plants unless they are part of a national quality assurance program, like Canadian Quality Assurance (CQA) or Canadian Pork Excellence (CPE). Animal care requirements are regularly revised if scientific research demonstrates that changes in practices are warranted. Consumers can be confident that hogs in Canada are ethically raised.
Modern Canadian hog farmers take pride in their record on mitigating environmental issues and upholding animal care standards. It is also a record that should be a source of pride for consumers. Nutritious, high-quality Canadian pork is raised in a sustainable way that will help ensure the industry’s ongoing contributions to our economy and job creation in our local communities. Telling this story consistently and more frequently will help reinforce demand for Canadian pork everywhere.
Invasive, non-native wild boar at large are a pest and a scourge. Their presence jeopardizes livestock, crops and the environment. A growing number of Canadian swine industry stakeholders are taking up the sword against this wicked but intriguing foe.
Rallying the troops can be difficult when the enemy is mostly unseen, poorly understood or perhaps not even viewed as a threat. But rallying the troops to further the cause of wild boar eradication in Canada is long overdue.
Still, the Canadian war on wild boar continues to lack awareness among many people, even within the swine industry. The growing problem of invasive, non-native wild boar at large has been plaguing farmers and landowners since at least the 1980s, and today’s population remains an under-studied, complex and deeply dividing problem. While some stakeholders are not yet on the side of swift, tangible action toward the goal of removing this species from our midst, they certainly should be.
The eradication of wild boar is a desperate and challenging but entirely necessary mission. For hog producers, much work must be done to mitigate the spread of swine diseases to domestic pigs, including the sizeable, high-value commercial herd. For cattle ranchers, protecting pastures from rooting is a priority; for crop farmers, defending fields from being eaten from the inside-out; and for ecologists, preventing widespread environmental degradation.
Beyond the specific impacts of wild boar on their surroundings, a much more significant risk is posed by their presence: the potential for transmitting diseases like African Swine Fever (ASF) – which would practically end Canada’s global trade in pork – along with Foot and Mouth Disease (FMD) – which would pose an incredibly challenging health scenario for the commercial hog and cattle herds.
Untold harm could be on its way if the war on wild boar is lost. But collectively, we have barely begun to make an advance. Who will step up? A few prominent stakeholders are leading the charge, but more are needed.
Eradication is the only solution; anything else will certainly fall short and seriously threaten Canada’s multi-billion-dollar pork and beef industries if foreign markets shut their doors to Canadian meat exports, which they certainly would, if the existing precedent holds up. This is not a gamble anyone should be willing to take, but yet, the dice are still being rolled, with Canadian farmers standing to lose everything they have worked their lives for, and Canadian consumers standing to lose the quality-assured, safe, nutritious products they know and love.
If it sounds more serious than you thought, it is.
Battling boar with bushcraft
Alberta Pork’s field-based wild boar eradication contractors, Larry and Scarlett, head out to replenish one of their traps set on private property in north-central Alberta. Gaining the trust and permission of landowners is a crucial part of the process.
At a meeting of the Alberta Pork board of directors in late 2020, it was decided that more than $400,000 would be committed toward wild boar eradication and related disease prevention efforts – a bold and courageous throwing down of the gauntlet by Alberta producers.
“The commitment of funding from our board was instrumental in helping our organization support two consultants to track, trap and kill wild boar,” said Charlotte Shipp, Industry Programs Manager, Alberta Pork. “Thanks to this funding, combined with support from our provincial government and other partners, Alberta is taking an aggressive and hardline stance on eradicating wild boar at large.”
The consultants, Larry and Scarlett, are two individuals hot on the trail of Alberta’s wild boar. With strategic direction from Alberta Agriculture and Forestry, these troopers have taken the fight of this destructive, elusive species straight into the battlefield where the formidable creatures make their stand.
Larry and Scarlett’s covert operational tactics are well-suited to the work they do. Wild boar are extremely intelligent and driven to survive, which can make them very unpredictable.
“If you hurt one of them, they won’t stop until either you’re dead or they’re dead,” said Larry. “That’s just the way it is.”
The traps set by Larry and Scarlett are found in several strategic locations more than 100 kilometres northwest of Edmonton. Because much of their work takes place on private land, establishing relationships with locals is a necessary component of the job.
“Our biggest reward is getting to know landowners and sharing the joy and satisfaction after we have removed a sounder [group of wild boar] from their property,” said Scarlett. “Larry and I are a husband-and-wife team, and we own land ourselves, which helps them identify with us a bit better, I believe.”
Trust is key when operating on private land, not only to gain access to relevant sites, but also for the maintenance of pricey equipment. In terms of choosing where to set traps, much of the intel relies on Larry’s depth of experience in the bush.
“You have to look for patterns – almost like boar ‘highways’ – to determine where they may have been, where they may be now, and where they may be going next,” said Larry. “They’re so smart that it’s incredibly difficult at times. Probably the only animal out here that comes close to their intelligence is a wolf.”
If intelligence and stubbornness are positive signs for the survival of a species – even an invasive one – then wild boar are masters of their adoptive domain.
“You can really see where they’re going in winter, but the conditions for us can be brutal,” said Scarlett. “A lot of our equipment suffers because of this. In summer, we get about three weeks of battery life for our traps and cameras, but in winter, they have to be recharged and replaced almost weekly.”
Each site includes a purpose-built trap and two tracking cameras, one of which is mounted at eye level tens of feet away from the trap’s gate, and the other of which is mounted up high on a nearby tree, peering into the trap itself. The tree-mounted camera essentially allows Larry and Scarlett to deliver the final verdict on any given trap – often from the ‘comfort’ of their own bed, usually between the hours of 11 p.m. and 5 a.m., seven days a week.
Scarlett scatters bait within the trap, while Larry replaces a camera battery. Every trap is somewhat of an experiment, and every specific location is closely guarded to protect the equipment and preserve the confidence of the targeted sounder.
The cameras operate using cellular data transmitted when a passing animal triggers a sensor, which sends a notification to the couple’s mobile phone. Even in the middle of the night, they have to work quickly to make the call on whether to send the signal back to the trap for the gate to close. This is only done when they can see an entire sounder inside of a given trap. Otherwise, if even one individual is observed outside the fence, closing the gate could botch the entire operation.
“The sows and juveniles absolutely have to be in the trap,” said Scarlett. “We won’t drop the gate until we are sure the complete sounder is inside, which can take weeks or months depending on how eagerly a particular sounder enters the trap. If we drop the gate with individuals still outside, we end up educating them, which makes our job way more tricky.”
Each sounder numbers approximately 10 to 15 individuals. Females – which compose about 70 per cent of any sounder – will farrow litters of six to nine juveniles twice annually, starting when they reach reproductive maturity at six-months-old. Eradicating an entire sounder, in that case, could represent upwards of 100 individuals removed from an area for that given year. Ensuring that traps are capable of doing the job right is a key concern.
Boars are notably confident in the presence of fellow wildlife – even bears – which creates two challenges: convincing a sounder to enter a trap willingly, and also keeping bears away from the bait that is meant for boars. The bait is a corn-based proprietary mixture concocted in Larry and Scarlett’s own basement through trial and error.
Larry climbs a tree next to the trap to ensure that the cellular signal from the mounted camera is synchronized with the trap gate mechanism below. This signal is the lifeline for the couple’s phone to activate the gate, and a death sentence for the trapped sounder.
Larry and Scarlett’s work is largely thankless and unknown, except among the landowners with whom they have forged friendships beyond the scope of their boar-based efforts. Such is the case with one landowning couple living near the intersection of where an unpaved road meets a relatively perpendicular river – on the edge of nowhere, to most outsiders.
The landowners have lived in that spot for more than four decades, and only within the past couple of years did they gain first-hand experience with wild boar when a ruthless sounder tore a shocking path of destruction through their cattle pasture and barley crop. Like many of their neighbours, the landowners previously had little idea just how dangerous the boars could be.
“It’s not only land that’s affected but livestock too,” said Scarlett. “We’ve heard from landowners about their cattle having abortions due to the stress of noticing wild boar in the area. And who knows if a boar would ever attack a calf? They wouldn’t hesitate to eat just about anything convenient, including meat.”
Damage to pasture and crops is a concern for many landowners, who are sometimes reluctant to believe the potential for destruction until they experience it themselves.
Skepticism contributes to a widespread misunderstanding or downplaying of the issue. In 2008, the Government of Alberta issued a bounty on wild boar, and to this day, many avid hunters would love to come across one to shoot, with no need for a tag. Unfortunately for hunters, the bounty system essentially failed and, in fact, worsened the problem altogether. For this reason, the practice of hunting wild boar in Canada is expressly discouraged.
And it is not just wild boar hunting, but hunting in general, that complicates eradication. As fall approaches, and plentiful summer food stocks begin to run dry, boars have a habit of going into hiding, combined with the encroachment of hunters who are seeking other forms of game.
“It’s like a faucet turns off,” said Scarlett. “As soon as hunting season begins, we notice a dramatic reduction in activity on our cameras. They become even harder to track.”
Despite the potential for conflicting viewpoints on hunting, Larry stressed that it is not an us-and-them mentality.
“I have nothing against hunters, and I’ve hunted my whole life,” said Larry. “The sites that receive the most pressure from hunting are the same sites where we tend to eradicate the most wild boar. It’s no coincidence; anything short of whole sounder removal increases the wild boar population.”
Looking at the bigger picture, Larry sees potentially negative consequences if the problem persists.
“We just want to do everything we can to contribute to the success of the program,” said Larry. “We really have to stop the spread of wild boar. If we don’t, we’re all going to suffer for it. If farmers have to deal with this situation while trying to produce food, it’s going to be felt all the way to the grocery store.”
Swapping war stories with a veteran
Alberta’s famous feud with the invasive Norway rat is a well-documented success story of pest management, but there is still a long way to go with wild boar.
Perry Abramenko is an Inspector & Pest Program Specialist with Alberta Agriculture and Forestry who has been working since 2013 on the wild boar file.
“The bounty program did not accomplish what it was supposed to, in terms of getting rid of boars, but it did give us a lot of data to work with,” said Abramenko. “With any kind of human disturbance, these animals scatter and infest new areas. They’re so intelligent, and they’re nocturnal, so they know where they can be safest.”
The data collected through the bounty program suggested in 2013 that the problem was more noticeable in some municipalities than others, but the prevailing belief since then is that sightings are simply under-reported. While certain municipalities may have a higher concentration of observed wild boar, that is an insufficient way of gauging the scope. According to Abramenko, 24 of Alberta’s 74 rural municipalities have reported at least one wild boar sighting – a much broader range than only two eradication specialists can handle on their own.
“Those sightings are the ones we’re aware of. Are there others?” asked Abramenko. “There certainly could be. This is why reports from the public are so vital.”
Around the time of Abramenko’s hiring, the Alberta Agricultural Services Boards’ provincial committee – which directs the province’s 69 municipality-based farming regions – passed a resolution that has provided the pretext for implementing stronger measures against wild boar.
From north to south, at least 10 of Alberta’s rural municipalities today have passed bylaws banning wild boar, including the counties of Spirit River, Grande Prairie, Lesser Slave River, Smoky Lake, Thorhild, Yellowhead, Wetaskiwin, Stettler, Red Deer and Cardston. But that still covers fewer than half of the locations where the animals have been spotted and, curiously, few of the acknowledged hotbeds.
“In addition to supporting the work of Larry and Scarlett, with Perry’s help, Alberta Pork will be pushing for all rural municipalities in the province to ban wild boar,” said Charlotte Shipp, Industry Programs Manager, Alberta Pork. “If we don’t have the law on our side, we are placed into a major predicament. We will ask municipal representatives to assist us on this; otherwise, landowners in their communities will be affected.”
Currently, wild boar are replenishing their numbers quicker than they can be dispatched. Piglets grow up and reproduce within six months of birth.
Novel, cross-ministerial approaches are also being examined. Partnering with Alberta Environment and Parks, work is being done to train invasive-mussel-sniffing dogs to detect wild boar scat. The same biologists behind the sniffing project are also collecting water samples from the province’s lakes to detect the presence of wild boar DNA, as another means of surveillance. By analyzing water samples, further hints could be given, and by using drones to survey land and crop damage, there is no shortage of techniques being explored or opportunities to enhance efforts, if appropriate resources are made available.
“The sooner you get onto eradicating a pest, the likelier you are to be successful,” said Abramenko. “If you can get onto them when it’s an emerging population, when the densities are not very high, that’s ideal. That said, I think eradication is still achievable, as long as we stay the course.”
The larger, farther-reaching goal has extended toward establishing a permanent program involving wildlife groups.
Taking a fresh approach to the frontline
As time goes on, new regiments continue to join the alliance against wild boar, including the Alberta Invasive Species Council (AISC).
“We wanted to take the wild boar issue and make it very public,” said Megan Evans, Executive Director, AISC. “It took a long time, but we carefully crafted messaging to be broadcasted through various forms of traditional and online media.”
With assistance from Alberta Agriculture and Forestry, Alberta Pork and Alberta Beef, AISC’s ‘Squeal on Pigs!’ campaign has received a great deal of attention on social media, and the organization has been sought after by mainstream media outlets as well, further amplifying the campaign’s reach.
“It started when I got a hold of officials in the U.S.,” said Evans. “That’s where we got the ‘Squeal on Pigs!’ concept from – we actually borrowed and adapted their materials, which fit perfectly with what we are trying to do.”
Alberta’s ‘Squeal on Pigs!’ campaign is raising public awareness of wild boar.
Not everyone is entirely happy with the push toward eradication, however. As with many issues touching animal agriculture, an open online petition, ‘Stop Mass Extermination of Wild Boars,’ has been circulated on the website, ‘Animal Petitions: Humans Defending Animals From Other Humans.’ The petition has received nearly 20,000 virtual signatures from individuals who may or may not be from Alberta or even Canada.
“It’s incredibly disappointing that some members of the public insist that our collective efforts toward eradication and awareness are not the right course of action,” said Darcy Fitzgerald, Executive Director, Alberta Pork. “It represents a total disregard for the farmers who produce food for Canadians and the natural ecosystem this invasive species is infringing upon.”
Unmoved by critics, Evans is pushing forth and encourages anyone and everyone interested in joining AISC’s efforts to do so.
“We’re hoping to make this campaign even bigger,” said Evans. “Billboards, hats, t-shirts – just about anything to spread the word. That’s what we’re all about.”
What is the best way to report a wild boar sighting in Alberta? AISC’s free ‘EDDMapS’ smartphone app is a convenient way to provide the necessary information to Alberta Agriculture and Forestry. Alternatively, sightings can be reported by emailing af.wildboar@gov.ab.ca or by phoning 310-FARM (3276).
Understanding the art (and science) of war
Invasive species management is also a focus on the national level for the Canadian Wildlife Health Cooperative (CWHC). Working with the National Farmed Animal Health and Welfare Council (NFAHWC), the two organizations are collaborating to help facilitate knowledge sharing and coordinate mitigation efforts across Canada, with connection to the Canadian Pork Council’s (CPC) African Swine Fever (ASF) Executive Management Board.
Environment and Climate Change Canada has endorsed the CWHC to lead a project that supports mitigating the social and ecological harm created by wild boar. As a starting point, the group performed a scan of wild boar prevention efforts for each province. After that, strategic and operational working groups were formed. The strategic approach includes hosting a webpage of wild boar resources, in addition to a communications approach that directs public awareness efforts through social media. A disease surveillance sub-group has been tasked with developing a national sampling protocol for wild boar and the establishment of a central tissue repository. If implemented, the tissue repository would store samples to support research and testing by independent investigators.
Before being able to understand the disease implications of wild boar, the industry first has to establish where they are. Ryan Brook, a researcher at the University of Saskatchewan, has been observing the problem for more than a decade. Try as he might, adequately expressing the gravity of the situation has been a struggle for Brook, whose persistent efforts to study the spread of wild boar and raise alarm bells have been met with some resistance.
“For the first eight years I did this work, everyone ignored me, and for the next two, everyone yelled at me, but now it’s slowly changing,” said Brook. “No-one benefits from having wild pigs around, which means there’s a ton of common ground to work together, if we choose to.”
The counties of Woodlands and Lac Ste. Anne in Alberta; the rural municipalities of Turtle River, Lake Lenore, Barrier Valley, Bjorkdale and Tisdale in Saskatchewan; and the rural municipality of Victoria in Manitoba are all in the ‘high’ occurrence category for boar sightings.
In 2019, Brook and his PhD student, Ruth Aschim, released a comprehensive map of wild boar – a great start at capturing the extent of the invasion, given the inconsistency and inattention to reporting sightings and truly investing in understanding the issue.
“It’s important that we have useful and scientifically defensible work,” said Brook. “Without it, we’re not too sure if we’re making a significant difference. Sometimes I think eradication efforts are a bit like mowing the lawn – we’re dealing with it the best we can, but the populations rebound so quickly. We don’t really know unless we have the data.”
When it comes to persuading deniers – those who believe the crisis is being overblown – Brook thinks appealing to the pocketbook may be effective.
“The economic impact needs to be studied better,” said Brook. “We know about compensation for crop losses, as an example, but what about the cost of disease? Is it worth the risk?”
Supporting Brook’s theory, a study released in July 2021 from the University of Queensland (Australia) and University of Canterbury (New Zealand) has used predictive population models and advanced mapping techniques to suggest that wild boar may be responsible for rooting an area covering a total of 36,000 to 124,000 square kilometres in regions of the world where they are not native. The result is the release of around 4.9 million metric tonnes of carbon dioxide annually, which is the equivalent of 1.1 million fossil-fuel-burning motor vehicles. Another study out of Australia, measuring the financial impact of pests over the last six decades, suggests invasive mammals, including wild boar, may have cost the country $66 billion during that span of time.
From their massive expansion efforts to their outright destructive behaviours, in addition to what we area learning about their impact on carbon emissions and the economy, wild boar present a ballooning challenge for ecologists to convince policymakers to take meaningful action.
The standoff south of the border
In the U.S., wild boar – known as ‘feral swine’ – are practically endemic in the southern states from Texas to South Carolina. Few northern jurisdictions, to this point, have been a concern, but that is changing.
The U.S. Department of Agriculture’s (USDA) standard nomenclature for wild boar is ‘feral swine.’ In 2014, in response to the increasing damage and disease threats posed by expanding feral swine populations, U.S. Congress appropriated $20 million to the USDA’s Animal and Plant Health Inspection Service (APHIS) for the creation of the collaborative ‘National Feral Swine Damage Management Program.’ Congress has continued to allocate funds annually, in support.
Through testing feral swine carcasses recovered from across the country, USDA-APHIS monitors for African Swine Fever (ASF), Classical Swine Fever (CSF), Foot and Mouth Disease (FMD), pseudorabies and swine brucellosis. To date, feral swine blood samples have been seropositive for pseudorabies and swine brucellosis, but, thankfully, no cases of ASF, CSF or FMD have been identified. These afflictions are all critically concerning for the commercial swine industry, making this testing an invaluable part of surveillance efforts. Recently, USDA-APHIS and the Canadian Food Inspection Agency (CFIA) reached an understanding regarding a protocol to maintain cross-border trade between our countries in the case of an ASF outbreak in wild boar on either side of the border – a positive development, however cynical seeming.
“These animals don’t respect ranch fencing, county borders, state borders or international borders,” said Justin Bush, Executive Coordinator, Washington Invasive Species Council. “Our challenge is finding the best ways to engage the public and motivate them to participate in feral swine reporting. The mantra is, ‘Squeal on Pigs!’ If you see something, say something.”
In 2017, the state of Washington conducted a study to measure the potential economic impact of feral swine when it comes to harming crops and livestock. Following the study, the total price tag was estimated at more than $6 billion worth of agricultural commodities at stake.
“Any time humans play a part in invasive species trends, it becomes very unpredictable. That’s the hardest thing to grapple with,” said Jeanine Neskey, Extension Specialist, USDA-APHIS. “Genetics samples are helping us understand where pigs are moving to and from. We can tell that pigs found in one area are directly related to populations found hundreds of miles away, which suggests people are moving them intentionally. In some cases, law enforcement has caught offenders, and they’ve been prosecuted, but that’s rare.”
In Texas, Oklahoma, Arkansas, Louisiana, Mississippi, Alabama, Georgia, South Carolina and Florida, feral swine are present in all but a small handful of counties, and they are on the move in Canada’s direction. Missouri, sharing its southern border with Arkansas, is at a crossroads. Directly north of Missouri sits Iowa – a major commercial pork-producing and -processing region with little to no natural fortifications to stem the spread. Beyond Iowa, Minnesota and Manitoba.
“We still have a lot of work to do to get people to realize the problem,” said Neskey. “Everyone should care if feral swine are running your local farmer out of business.”
Rolette County, North Dakota, is the only U.S. jurisdiction along the 49th parallel where any population of feral swine was known to exist in 2019. The county is adjacent to Turtle Mountain Provincial Park in Manitoba, directly south of Brandon. In the northeastern U.S., target areas exist near the Vermont and New Hampshire borders with Quebec, just south of Sherbrooke.
Nearly half of all feral swine carcasses tested at Texas abattoirs came back positive for various bacteria related to foodborne illness.
In 2015, a study conducted by USDA-APHIS revealed that nearly 50 per cent of more than 300 samples collected from feral swine carcasses processed at Texas abattoirs contained antibodies for Leptospira – the bacteria responsible for Leptospirosis in animals and humans. Without treatment, Leptospirosis can lead to kidney damage, meningitis, liver failure, respiratory distress and even death. Just the presence of Leptospira at an abattoir puts workers at risk, not to mention consumers.
Feral swine presence, worsened through hunting, routinely jeopardizes the safety of motorists in Texas as well. Vehicle collisions with these animals can occur year-round, 24 hours a day, with nighttime during the fall and winter months presenting the greatest risk. In some cases, motorists have died as a result of these crashes, which, collectively generate $36 million worth of personal and property damage annually.
In a landmark, progressively minded decision, in 2015, Montana became the first U.S. state to declare wild boar hunting illegal. Since then, keeping wild boar at bay has been a focus for the state, and no major concerns have emerged since then, as a result.
In contrast, in 1999, the Tennessee Wildlife Resources Agency attempted to control wild boar by opening a statewide hunting season with no tags or bag limit. Unfortunately, it was during this period that their numbers grew rapidly, as disjointed populations began to occur in areas of the state where they had never existed before. Recognizing its gaffe, the state shifted gears in 2011, declaring wild boar an invasive species, rather than wild game – partly acknowledging its mistake but not fully rectifying it.
The Montana-Tennessee dichotomy represents a tale of two states: one confronting the matter before it is too late, and one being dismissive of the matter until the window of opportunity has closed. It is a slippery slope and an uphill battle for champions of eradication.
“Everybody has a role to play, but they might not be aware of it,” said Bush. “I believe we can eliminate feral swine, but it is going to take the whole community from agriculture and government to Indigenous groups and foresters.”
Saskatchewan and Manitoba offer backup, urge unity
Wild boar thrive in areas where prairie meets bush. Historically, Moose Mountain Provincial Park – 200 kilometres southeast of Regina – was considered a mecca for sightings.
In Saskatchewan, where the range and concentration of wild boar have received considerable academic investigation, producers too are taking note.
“We’re still trying to understand the full extent of the problem. We’ve known for years about some areas where wild boar might be living but finding evidence of exactly where has been challenging. Property damage of any kind is a concern,” said Mark Ferguson, General Manager, Sask Pork. “It’s also a high priority for our board on the disease side. We fully appreciate the need for vigilance, since there’s still a significant risk that’s not worth taking.”
The Saskatchewan Crop Insurance Corporation (SCIC) conducts eradication efforts through its ‘Feral Wild Boar Control Program,’ based on reported sightings mostly from observant landowners. In some cases, insurance payouts have been made directly linked to crop damage caused by wild boar. In the past two decades, Moose Mountain Provincial Park in the southeastern part of the province attracted interest.
Saskatchewan Agriculture also has a surveillance program, run in cooperation with SCIC, with camera-equipped bait stations placed in areas where sightings have been reported and in areas close to farmed wild boar operations. To date, more than 40 bait stations have been established. Currently, attention is being paid to the Lenore Lake region in the north-central part of the province – home to a wildlife area and bird sanctuary – where more than 500 wild boar specimens have been removed in the last five years.
“We are asking the public not to hunt these animals and report them instead,” said Ferguson. “Because hunting can contribute to the problem, the best course of action is to report sightings to the 1-833-PIGSPOT hotline in Saskatchewan or to the nearest SCIC office.”
Recognizing the growing need to act, Manitoba Pork has looked to Alberta Pork as a guiding example for how to approach the issue.
“There are differences with each jurisdiction,” said Darcy Fitzgerald, Executive Director, Alberta Pork. “If we want the program to work, we need coordination across the country, and we need to have resources from all levels of government to target our programming.”
Currently, Manitoba Pork is seeking support from the provincial government to provide funding for activities that would kickstart an eradication campaign where one does not already exist.
“We went to our board of directors and presented the problem,” said Jenelle Hamblin, Manager, Swine Health, Manitoba Pork. “They saw what’s going on in other parts of the world, and their response was, ‘There’s no way we can let that happen here.’ They know it would be a huge detriment to our sector.”
In Manitoba, much of the known wild boar sightings have occurred on the periphery of the Manitoba Escarpment – a wooded upland region where bush meets agricultural land. The region contains Riding Mountain Provincial Park and Spruce Woods Provincial Park. Hamblin suggests that this area of the province could start attracting wild boar if care is not taken.
“Wild pigs can harm our domestic swine herd and trade in pork, and that’s a problem. They can harm crops, and that’s a problem. They can harm the environment, and that’s a problem,” said Hamblin. “The common denominator is that, if they’re gone, they don’t pose that risk anymore. This is why we all need to work together.”
The current proposal from Manitoba Pork includes a collaboration with Manitoba Agriculture and Resource Development, along with wildlife groups in the province, to assess a range of strategies that could be employed for eradication.
In Manitoba, wild boar sightings can be reported by emailing wildlife@gov.mb.ca or by phoning the nearest Manitoba Conservation and Climate office.
Ontario allies with the West
Rather than waiting for a problem to present itself, Ontario is getting ahead of any potential threats by implementing an ‘invasive wild pigs’ control strategy, which, in addition to wild boar, includes abandoned pet pigs.
While the wild boar issue in Canada is mostly contained to the prairies, in Ontario, new support to address the problem is coming, thanks to an increasing sense of anxiety and awareness of how easily their populations can spread.
In April 2021, the Government of Ontario issued a draft proposal for review: ‘Ontario’s Strategy to Address the Threat of Invasive Wild Pigs.’ which calls for clear communication, robust policy, management action and strong collaboration between government agencies to address the threat of wild boar in the province.
“We are currently considering input that we received to finalize the strategy,” said Bree Walpole, Senior Policy Advisor, Ontario Ministry of Natural Resources and Forestry Services. “Wild pigs are not established in Ontario at this time, and we aim to keep it that way.”
As in Alberta, the plan recognizes the serious threats attributed to the spread of wild boar, and it touches on the impact to relevant stakeholder groups, like Ontario Pork. Ontario’s plan also suggests a ban on hunting wild boar, using a regulatory approach under the province’s Invasive Species Act. The amendment would still allow landowners to kill wild boar to protect their property from damage, including biosecurity reasons. In addition to directly addressing the issue of hunting, the Ontario plan also takes aim at wild boar in captivity.
“We want to make sure support is available to anyone who needs to transition,” said Stacey Ash, Manager, Communications and Consumer Marketing, Ontario Pork. “Farmed wild boar poses a risk, but we recognize the need to assist those farmers who will need to phase out these kinds of operations.”
In Ontario, wild boar sightings can be reported by emailing info@invadingspecies.com or by phoning 1-800-563-7711.
No armistice in sight
At the present time, one can only dream of declaring victory in the war on wild boar, but the campaign continues in earnest.
With relatively weak and inconsistent communication and leadership dominating the discussion around wild boar to this point, the Canadian pork industry will have to remain stationed in the trenches, as wild boar continue to roam. In fact, the firefight may be only just beginning.
While some strategic partners have been providing munitions support, others, sadly, continue to look on from afar with doubt. Learning the hard way may be the unfortunate but inevitable result, in some cases, and all cooperative stakeholders should take note and work to rally the critics within the industry to become supporters. Without all stakeholders on the same page, every link in the value chain can be considered at-risk.
With the news of African Swine Fever (ASF) arriving in the Dominican Republic and Haiti, foreign animal disease threats remain the chief concern of the commercial hog industry in North America. It is incumbent upon those within the industry and government to support greater action to combat wild boar, and it is everyone’s responsibility to take a stronger stance on this issue.
What will it require for our country to be able to declare victory on wild boar? Before we get too far ahead of ourselves, it starts with an honest recognition of the task at hand. It is gut-check time, and we have to hit the ground running.
Through research, eradication attempts and public campaigns, we have to examine all angles of this hairy, audacious goal. And while the industry is generally moving in a unified direction, enlisting additional soldiers will be the key to winning not only the latest battle, but the larger war on wild boar in Canada.
Pork Commentary, October 12th, 2021 Jim Long, President-CEO, Genesus Inc.
No Chicken
While we were in Spain it was interesting that there was virtually no chicken on restaurant menus. Seems to us a good plan.
U.S. Pork exports to Mexico continue at record pace.
Year to date 487,571 mt vs. 378,716 mt last year. The pace really accelerated in the second quarter. A week ago, 14,550 mt. Our Farmer Arithmetic says 14,550 is equal to 170,000 hogs. The Mexican market has really supported U.S. prices as it can take carcass parts that Packers in the U.S. don’t have labor to cut as they would want.
Mortality
A report by MetaFarms, a major U.S. swine data system, indicates that Finishing mortality in their database of 10 million hogs (5,951 closeouts) has in the first eight months of 2021 been the highest mortality in the last ten years at 5.15%. Worse than even in the PED year of 2014 of 4.66%. We expect that PRRS 144, further use of weak genetics, and continued lack of labor is leading to less stockmanship with all points contributing to the record finishing mortality.
Of note the MetaFarms average performance of finishing with 6% plus mortality in 2021 48.4 lbs. to 282.73 lbs., ADG 1.84 lbs., FCR 2.97, ADFI 5.48 lbs., Full value 88%. The proceeding numbers would be indicative of millions of hogs, finished to date in 2021, and shows the ongoing challenges in our industry.
Sow Mortality at record levels, finishing mortality at record levels. Dead sows don’t produce pigs and dead finishers cost with no revenue. Lots of opportunities to make improvements.
China’s swine industry is in free fall financially.
Most estimates put the cost of production farrow to finish at 21 RMB kg ($1.51 U.S. lb.). Hog Market in some areas is 11 RMB (88¢ U.S lb.). Farmer Arithmetic – a loss of 71¢ lb. times 260 lbs. market hog = $184 U.S. per head loss. Even if this is higher than reality, it’s not hard to believe losses above $100 per head everywhere. We don’t believe there has ever been a market that’s had such high losses.
All indications are there is massive liquidation underway. Why wouldn’t there be? Imagine our industry losing $100 plus per head? We were told this past week that China liquidated over 4 million sows in September. Who knows if is right but not hard to imagine. In some areas of China, the sow cull price is 2 RMB kg (less than 20¢ lb) while market hogs 80¢ lb. This sow price is a reflection of big supply. The sow liquidation in China is putting huge amounts of Pork on the market. A China observer joked this past week “Pork is cheaper than cabbage”. The old adage, the higher the high the lower the low, is manifested in China. Record profits begot record losses. The longer the liquidation continues in China, the less Pork in the future. When price recovers expect strong prices and a large increase in Pork imports. There is the hog cycle, then there is China’s Super Hog Cycle,, Huge Highs – Huge Lows.
Denmark
When we were at Figan show in Spain we heard about the problems the CEO of Danbred was having. Below are reports from the Danish newspaper (links) describing the issue (in Danish Language).
Danbred CEO accused of sexual harassment. 3 women were involved; they were offered financial compensation. One woman was paid 700,000 DKK.
The Board of Directors apologized to the women and let the CEO continue on the job with a warning, then newspaper articles came out describing the situation.
That day CEO was fired.
3 days later Board of Directors all left.
Now new Board of Directors was appointed and new CEO was appointed with having to replace several employees that had quit.
Newspaper article reports Danish experts see latest episode as very serious for Danbred – to lose CEO and entire Board of Directors all in same week – it will be huge challenge to re-establish confidence in Danbred.
Pork Commentary, October 04th, 2021 Jim Long, President-CEO, Genesus Inc
Our first week, as we reported last week, was at Figan the major livestock exhibition in Spain. The second week we spent traveling to customers and prospects throughout Spain. Our observations:
Many if not all we visited read our weekly pork commentary that’s translated into Spanish. Some comments people quoted “Chicken Little Economists”, “prolapses”, “sow mortality”, “Better Tasting Pork”. All producers we talked to wanted to discuss World Markets. China, USA, Europe, Russia, etc.
Spain has prospered due to the large amounts of Pork they exported to China. Currently, Spain’s exports to China are negligible compared to the past. Some plants told us 70% of their pork output had been going to China. Now they must find new markets within the EU or other countries. It’s a big adjustment.
Producers are wary of the future, current breakeven is between 1.18 – 1.22 Euros kg. The price for hogs is 1.12 Euros kg. Our calculation, it’s about $20 per head loss. The good thing for producers is last week was the lowest price in many months. Losses just began a month ago. This compared to Germany where due to ASF and foreign markets closing have been losing money for almost a year.
Spain has traditionally been a Piétrain sire market. The emphasis has been on lean and chasing the lowest cost of production. The reality with Piétrain, you get fresh pork that tastes like cardboard. No marbling, lighter color, and high drip loss eroding juiciness and weight. There is a revolution underway that packers, exporters, and retailers are seeing that there is a market for better-tasting pork, one that pays more for the quality. We visited three packers who now are using Genesus Purebred Duroc for their premium product. It’s interesting that in Spain the Danish Duroc and PIC 800 aren’t considered by producers – packers as real Durocs but synthetic hybrids. A low to middle-quality pork product is not much different than Piétrain ones that will not give a premium taste, flavor, and price.
Spain is also seeing sow mortality rising, similar to the USA. All from the same genetic culprits. Spanish producers realise dead sows don’t produce pigs.
We were asked if North America had the same pricing organisation as the Mercolleida. Mercolleida is when every Thursday representatives of packers and producers meet to establish the national price for Spain. They were surprised there was no collaboration in North America to establish a price between packers and producers. I was asked how was North American pricing established. It was tough question. Best I could describe was a near adversarial relationship between independent producers and packers. A kind of chaos, each pushing at each other. Different formulas. They were amazed at the daily top and bottom prices reported by USDA. One large Spanish integrator described the Mercolleida pricing as the best way for independent producers to have fair share of total margin. Sounds to us Spanish producers – packers are mostly satisfied with this pricing arrangement. Not too sure that would be the same in USA – Canada.
Spain producers are wary of the feed prices. They import 70% of their feed needs. Price of feed is about 30 – 40% higher than North America which drives up cost of production. North America cost of production is $20 – 30 per head lower.
Packers – Producers are challenged for labor in Spain. Our observation is they are challenged but able to get necessary number of people to get job done. Some Spanish packers picking up business from USA due to cutting needed for specific markets. The labor shortage in USA is preventing some market demand products to get job done. Advantage Spain.
Travelling A-2 highway in Catalonia, Spain. Have to say never saw more pig barns or trucks hauling hogs. A truck every minute. Huge concentration of swine production.
As we visited Spanish producers and packers, we were taken by the tremendous hospitality we were afforded. Lots of time for discussion, excellent lunches and dinners with many of them featuring their own pork products. The welcoming we received is much appreciated and is a shining example to the warmth of Spain’s industry.
Spain’s pig and packing industry is for all interests and purposes family-owned private companies. Everywhere we visited we met the family owners. They all have skin in the game and pig production is in their blood and main business. What we also found interesting is there is discussion regular between many of them maybe it’s because of the Mercolleida weekly group pricing culture, we saw many large producers talking to each other. This is different than North America where not much of this type of dialogue happens.
As we wrote last week, Spain is the third-largest producer in the world. They have created an aggressive system with a country-wide collaboration that lead to growth. We expect Spain would hold their sow herd over the next several tough profit months. Spain will benefit by the ongoing sow herd liquidation in North Europe. In future, Spain will ship pork to the market of EU gaining domestic market share. Part of that growth is the move to a greater production percentage of premium pork. Smart business people see the value and profit in selling superior quality products.
China was a big discussion in all our meetings in Spain. Our observations. There is huge liquidation going on in China. Just weaned pigs are selling for $10 USD. The China market hog price was touching 11 RMB/kg last week breakeven is over 20 RMB/kg. The difference, about $125 – 150 per head loss. Sow price is 6 RMB/kg. A sign of liquidation. ASF still raging, PRRS, PED. Lots of dead pigs. Losses of over $100, producers can’t pay bills. A major global vaccine company told us at Figan that they were no longer sending any product to China. China producers are losing as much money per head as we have ever seen. Some of the huge public swine companies in China borrowed billions of dollars to expand last year. They have expanded into a terrible market. The reckoning is here. Some won’t survive. Just like in USA 1998, when dust settled most of the companies that grew in the 90’s had new ownership. Smithfield pig production grew out of that crisis taking over financially challenged established producers. We expect similar in China. Who will survive, who won’t, we have no idea. The one truth in this business, when producers lose money you end up with less hogs. The greater the losses, the greater the adjustment. China has losses currently almost beyond comprehension. Sometime in 2022, China’s price will recover aggressively and once again China will need imported pork. It’s not if but when.
USA
The September 1st Hogs and Pigs Report indicating less pigs year over year has helped push lean hog futures up $20 per head in the last two weeks. What we see is less hogs in North America, liquidation in Europe, liquidation in China, less hogs globally in 2022. Already all hogs for market are bred until July 2022. Not much chance of expansion before late 2022 and we don’t think expansion will happen that fast. Our thoughts are, current 2022 lean hog futures are undervalued when we consider fewer hogs globally in 2022. Exports will rebound and domestic demand should be strong.
Left to right: Mercedes Vega Gonzalez General Manger of Spain, Italy and Portugal for Genesus, Eduardo Costa Casas CEO of Piensos Costa, Jim Long CEO of Genesus, Jorge Costa CEO of Grupo Empresarial Costa and Spencer Long of Genesus standing in front of the Sommos Winery in Barbastro, Spain. The Costa Food Group owns the winery. Costa Food Group is a World Mega Producer (150,000 sows)
Pork Commentary, September 27th, 2021 Jim Long, President-CEO, Genesus Inc.
The USDA September Hogs and Pigs Report is Bullish. Why?
Year over year almost 3 million hogs less in inventory (-4%).
Year over year herd down 143,000 (-2%).
Year over year 119 lbs. pigs down 2.7 million head (-6%) (down about 150,000 head a week).
Pig Crop June – July – August down 6%.
Farrowing Intentions September – November down 4%.
Year over year no doubt all inventory numbers and intentions are significantly lower. We expect these numbers will add a charge into market hog prices throughout the fall and winter. We expect high feed prices. The damage from financial Covid crisis in 2020 and cutting of farm capacities due to Prop 12 adjustment, all factors that have cut hog numbers.
Lean Hog Futures should gain 5–10 due to this bullish report in December and onward due to 2.7 million less head under 119 lbs. (-6%), that is about 150,000 fewer hogs per week to slaughter year over year.
USDA September 1st (x 1000)
2020
2021
2021/2020
Breeding
6,333
6,190
98%
Market
72,101
69,162
96%
Market by Weight Group
Under 50 lbs.
23,144
21,855
94%
50 – 119 lbs.
21,020
19,751
94%
120-179 lbs.
14,867
14,656
99%
180 lbs. and over
13,069
12,899
99%
Pig Crop
2019
2020
2021
2021/2020
June-July-August
36,370
36,056
33,900
94%
Spain Road Trip
This past week we attended the Figan Show in Zaragoza, Spain. Our Report:
The Figan Show was held over 4 days and attendance was much better than many expected.
Producers we talked to were concerned for the future as the industry has gone into a lost position and feed prices are historically high. Fortunately for Spanish producers, they have had good prices for many of the previous months.
Many exhibitors at the show from around Europe. All major global swine genetics companies attended except for Topigs–Norsvin which was surprising to us with Spain being the major swine production country.
Spain is the third-largest hog-producing country in the world and the largest in Europe with about 2.6 million sows. The market has been profitable until recently with prices now at 114 Euro/kg live, breakeven 120–122 Euro/kg live.
Spain has been the largest exporter of pork to China accounting for approximately 20% of China’s imports. With price collapse in China, Spain’s exports have dropped significantly putting more pork into Spain’s domestic market and other EU countries. Some countries i.e. Germany, Netherlands, Belgium, etc. are losing 35-40 Euros a hog currently ($50 US).
Spain’s swine industry is organized much differently than most of the rest of Europe, Spain uses an integrated model. Integrator usually owns sows, pigs, feed mills and in many cases slaughter plants. Contractors supply nursery, sow, finisher barns, and labor for a fee usually per head. In much of the rest of Europe, producers are independent family farms. Spain’s model has proven successful with its growing by over 1 million sows over the last decade while much of the rest of EU countries lost sow and pig numbers.
A unique part of Spain’s industry is the Mercolleida pricing structure. Every Thursday integrators, packers, and producer groups meet to discuss market and set suggested price for market hogs for the next week. This has gone on for decades. It’s unique in that a collaborated price is agreed between producers and packers. When you meet every Thursday, participants develop relationships that are not adversarial, how can it be, you know you are going to be together next Thursday and the Thursdays after that. It appears to have mostly struck a balance between packers and producers that has led to a sharing of hog profits better than other systems in the world.
This week we continue our tour of Spain. We will report other observations.
Genesus team at the Figan show in Zaragoza, Spain
Manuel Garcia of Vall Companys (World Mega Producer with 213,000 sows), who is also President of Interporc which is the national pig association of Spain, alongside Jim Long, President-CEO, Genesus Inc.
Pork Commentary, September 20th, 2021 Jim Long, President-CEO, Genesus Inc.
As I write, we are somewhere over the Atlantic heading to Spain. This week the Genesus team will exhibit at Figan Event in Zaragoza, Spain. Figan is a biannual swine conference and exhibition for Spain’s swine industry. After Figan we will be visiting several Spanish pork producers. In the next couple of weeks, we will report our observations.
Spain is now the third-largest swine producer in the world. Spain has relentlessly grown in production over the last decade with now about 2.8 million sows. In the European Union, Spain has grown while several countries have declined or stayed much the same in the last decade. Spain has benefited greatly from its packers developed relationships with China capturing around 20% of China pork imports. It will be interesting to hear the observations in Spain now that China’s global pork imports have slowed.
It’s also nice to be traveling again. But it’s not easy with fewer flight options, Covid tests, and double vaccination needed. Even so, getting out to visit customers, Genesus production facilities, nucleuses, multiplication, A-I centres, and industry is invigorating.
Observations
Read a report translated from Danish that feeder pigs have dropped to 15-20 Euros range ($20-25) – cost of production 50-60 Euros ($60-70). Denmark Exports about 15 million feeder pigs a year to Germany, Poland, Italy, and Spain. High feed prices and market hog price prospects have driven down the prices. In Germany and Poland ASF issue to market access has compounded the problem.
PRRS 144 breaks still ongoing. Nasty production killers. What will happen when fall comes when we normally see major breaks?
Interesting the seminars and articles on the explosion of sow mortality. With a dead sow worth or costing a producer $1,000 plus it’s little wonder. Many of you have had sow barns for many years. Bet in same barn, same almost everything, sow deaths have jumped, lots of zero or low-value sows, why? What’s changed? Weak genetics?
We believe U.S. lean hog futures have dropped lower than should. We expect cash lean hogs to stay relatively strong through the fall. We don’t see hog numbers to be increasing relative to a year ago. Beef prices, Chicken prices are strong. This supports Pork.
Pork Commentary, September 6th, 2021 Jim Long, President-CEO, Genesus Inc.
China
The hog price in China is 96¢ U.S. lb. (14.2 RMB/kg). Losses continue for China’s pork producers. The Financial Times estimates that publicly owned swine companies have lost over $70 billion U.S. in stock value since February. That’s a massive revaluation.
This past week USDA came out with an estimate that China’s hog production will decline 14% in 2022 caused by ASF, other health issues, and contraction in China’s hog production due to financial losses. 14% is a decrease of about 1.8 million heads a week.
According to China’s Ministry of Agriculture and Rural Affairs (MARA) the cost of raising pigs this March to June was 2800 RMB per kg ($1.58 U.S. liveweight a lb.). The average current selling price is 14.2 RMB kg (96¢ lb.). The loss is 1.32 RMB kg (-64¢ U.S liveweight a lb.). Simple arithmetic; average current loss per head is $160 (250 lb. hog). In the first 6 months of the year, China averaged just under 13 million hogs marketed per week. Farmer Arithmetic; $160 per head loss average, times 13 million head = just over $2 billion U.S. a week loss?
This type of loss will be leading to huge liquidation and obviously ending most if not all construction. The loss level is unprecedented; no wonder reports of pigs dying without feed, bills unpaid, biosecurity being cut, disease increasing. We expect China will be cutting production at levels we can’t comprehend. The USDA projected decrease of 14% is probably not high enough. China imports from the USA just under 5,000 tonnes of pork in the latest week. One thing this confirms, China is not bringing in much pork.
Europe
We understand the EU/Netherlands governments have a program to pay hog producers to close their farms. We understand the budget is about $500 million. This will lead to fewer hogs in the EU.
30 kg (66 lb.) feeder pigs from Denmark are selling for 200 DKK ($30 U.S). The 52-week average is 326 DKK ($52 U.S.). These current prices are well under the cost of production.
In Germany, the carcass price of hogs is 1.25 Euro/kg or 67¢/lb. U.S. Germany buys millions of feeder pigs from Denmark per year, the current feeder pig price reflects the poor market conditions in Germany. China’s pork imports slow down and ASF in Germany is increasing pork supply in all of the EU and pushing down prices.
USA
U.S. September corn closed Friday at $5.08 a bushel, down for September, being at $6.56 in early May. The $5.08 is the lowest price since early April. We expect to see some areas in the USA to be below $5.00 a bushel very soon. China hasn’t bought significant corn amounts since May. If major liquidation in swine is ongoing in China they won’t need as much corn. USDA projection of 14% decrease in China hog inventory would be about 90 million fewer hogs and a lot less corn needed.
Hybrid fall rye has a 20 to 30 per cent yield advantage over conventional rye, which ultimately passes savings on to pork producers, according to Saskatchewan-based FP Genetics.
Tell some pork producers they should include rye in their pigs’ diet, and you may get some strange looks. They might point out that pigs do not like it and – perhaps more importantly – that it contains high amounts of ergot, a fungal disease that reduces milk production in lactating sows.
Those are legitimate concerns if you are talking about traditional, open-pollinated rye. But over the past several years, developers have been working to tackle the weaknesses of rye as a feed source. The result has been fall hybrid rye, a crop that breeders and researchers have identified as a competitive – but ultimately complementary – feedstuff for swine.
When used as directed, marketers claim pigs get a low-ergot feed they find palatable, filling and even calming. Proponents also tout its high amount of fibre – a trait inherited from its conventional counterpart.
On the cost front, research is showing that hybrid fall rye can offer producers a cheaper (or at least comparatively priced) feedstuff that is virtually equivalent to wheat and barley in terms of key performance metrics such as dry matter intake, average daily gain, feed efficiency, body weight and carcass quality.
Since 2014, Saskatchewan-based FP Genetics – a certified seed company owned by seed growers across the Prairies – has been heavily involved in the marketing and distribution of hybrid fall rye, thanks to the company’s relationship with Germany-based seed breeding company KWS, which has made the improvement of the crop a wide-ranging goal. The company’s specific breeding goals include higher yields and ergot defence, followed by better disease resistance and minimized lodging.
“There is little doubt that reduced ergot content has played a role in the success of our lineup of hybrid fall rye varieties to date,” said Herman Wehrle, Director of Commercialization, FP Genetics. “The new products that are coming online have significantly improved ergot defence. Even in the few years we’ve been in commercial production here in Canada, over that time, we’ve improved ergot defence by well over 50 per cent.”
Pollen aids in ergot resistance
In the case of the KWS/FP Genetics system, ergot resistance has been achieved by increasing pollen shedding in the growing process. Essentially, it involves high amounts of pollen-blocking ergot from entering the plant.
“The pollen goes into the ears, so then the ear will be closed, and no fungi can go inside,” said Claus-Hinrich Heuer, Product Manager, KWS. “When we started these breeding programs more than 15 years ago, we had some problems with ergot. We found out that we had to cross a special gene called ‘Rfp1’ in our plants. Due to this crossing, we could increase the pollen shedding significantly.”
Further enabling pollen shedding is one of KWS’s key goals in the fight against ergot: “It’s important to use much more pollen from the breeding side. We want to identify minora – or smaller – genes, which are responsible for the pollen shedding of our hybrids. And there are other breeding aspects where we are seeing improvement on pollen shedding so we reduce the risk of ergot in the plants,” Heuer added.
Feed mixing rates: an ongoing discussion
When mixing hybrid rye into feed for hogs, FP Genetics recommends a graduated system based on size, growth stage and circumstances.
A big concern is whether or not pigs will eat hybrid rye. Even if this was an issue with conventional rye, it does not appear to be one that has carried over to the hybrid varieties.
“In the past, people thought that, when you feed too much rye, they don’t eat it, and it reduces the feed intake, but this is not the case,” said Heuer. “We have done a lot of trials with pigs at different ages, and there’s no difference in palatability between hybrid fall rye and wheat. The feed uptake is normal.”
So if hybrid fall rye is safe for hogs, keeps them productive, and they like it, how much should you feed them? The amount of hybrid fall rye to mix into feed rations has been an ongoing discussion among producers and researchers for years.
This year, Molly Lee McGhee – in her doctoral dissertation at the University of Illinois – measured the extent to which hybrid rye could replace corn in pig feed rations without compromising average daily gain.
She concluded that hybrid rye is a suitable feed ingredient for pigs at all physiological stages, with the bottom line being that it may replace a majority of corn in diets for growing and reproducing pigs without negatively affecting gain. Of note was her discovery that up to 75 per cent of corn may be replaced with hybrid rye in gestating and lactating sow diets without hindering sow or litter performance, with diets replacing 25 to 50 per cent of corn, actually improving lactation performance.
FP Genetics errs on the side of caution in its feeding guidelines, with recommended dietary inclusions ranging from 10 per cent for piglets weighing less than 15 kilograms to 50 per cent for gestating sows and feeders weighing 60 kilograms or more. This graduated rate of inclusion accounts for extra energy needed along the pig’s life cycle and stages of stomach development.
“As the pigs get bigger and the stomach gets more developed, we suggest more and more rye input,” said Wehrle. “Once the stomach is fully developed, we’re saying you can replace 50 per cent of feed with hybrid rye, and you will not ever see any issue with respect to average daily gain, feed intake or any of those key metrics a swine producer has to look for.”
An exception is lactating sows, which carry a 25 per cent inclusion recommendation: “The reason for that is because they need a ton of energy at that time, and even though they have a well-developed stomach, we realize energy at that point is very, very important, so we drop the inclusion versus gestating sows, which are at 50 per cent inclusion,” Wehrle added.
Better bang for your buck but less availability
Due to limited availability in Canada, including hybrid rye at an appropriate rate can pose a challenge. Although rye acreage – largely consisting of hybrid varieties – has been increasing on the Prairies (Statistics Canada pegs 2019 seedings at 352,000 acres, compared to 225,000 in 2016), it is a drop in the bucket compared to wheat and barley.
“Quite frankly, if we got 10 per cent of the hog market in Canada, we would have to be growing many millions of acres of hybrid rye. We’re not even close to it,” said Heuer. “Producers would use more rye in the diet if they could get enough material. So, they’re more likely putting 10 to 20 per cent in the diet.”
Crop farmers who get their hands on the seed, however, are, for the most part, in for a bargain. Fall hybrid rye varieties generally produce 20 to 30 per cent more than conventional rye, producing a lower cost per tonne. These savings are typically passed on to pork producers.
“We’ve been able to lower the cost per acre of feed, because we get more tonnes per acre, and to a feed buyer, that’s going to mean he’s going to have access to a product that is a lower cost to produce on a metric tonne basis,” said Wehlre. “In the feed business, 70 per cent of the cost of hog production is feed, so if we can reduce the cost of feed, that’s a pretty positive thing.”
Hybrid rye helps pigs relax
A study by Alberta Agriculture and Forestry revealed similar outcomes of body weight, daily growth performance, carcass traits and overall cost versus benefit when replacing wheat with hybrid rye at one-third, two-thirds and 100 per cent inclusions.
From a health perspective, hybrid rye’s high amount of dietary fibre features a range of benefits. The fibres present in the rye lengthen digestion and reduce insulin spikes, stimulating additional fatty acids like butyrate that benefit gut health and even have an effect on farrowing, such as fewer crushed piglets, more piglets weaned, reduced piglet mortality and heavier litters.
A soon-to-be-published study conducted by KWS with the University of Hanover in Germany has found that this dietary fibre has a positive effect on the overall calmness of the herd. The preliminary data shows a reduction in running, biting and overall undesirable behaviour.
“We see a significant difference,” said Heuer. “This is especially important in group housing, where pigs are always coming and going with fights taking place.”
Considering adding hybrid rye to your rations? You might be pleasantly surprised at what is possible!
Europe Market thoughts
Pork Commentary, October 18th, 2021
Jim Long, President-CEO, Genesus Inc.
As our readers know, we spent a couple weeks in Spain, the world’s third-largest sow herd country. At the time we wrote about the big drop in hog prices and thought major herd liquidation was ongoing in Northern Europe – Germany, the Netherlands, Belgium, maybe Denmark – Poland. This past week we looked at the markets in Northern Europe now. We have data on prices for the last six years.
In Spain, we were told cost of production farrow to finish was 1.18 – 1.22 Euro/kg. Using 1.20 Euros/kg average (64¢ U.S. liveweight a lb.), if breakeven 1.20 Euros and market price 0.90 the loss is 0.30 a kg – .30 x 125 kg market hog = 37.5 Euros loss per head ($45 U.S.).
One guarantee in the hog business is when producers lose money you end up with less hogs after the herd liquidation. Our synopsis, Euro sow price lowest in six years means lots of sows and packers only pay what they have too. Feeder pig price lowest in six years indicates lack of demand and the price finishers figure they can pay to at least break even. Current Market Hog price of 0.90 Euro/kg way below breakeven, losses will be mounting that’s why sow price is low, liquidation.
China
Meanwhile in China sow herd liquidation continues. We are told the sow price in some areas 2 RMB/kg (15¢ U.S. lb.). They are worth almost nothing. A sign of abundant sows coming to market. Why the liquidation? China’s breakeven estimated to be 21 RMB/kg, the current market price 11 RMB/kg. The loss is 10 RMB/kg (-72¢ lb.) multipled 120 kg hog = loss 1200 RMB per head (264 lb. hog, losing $190 U.S. per head!). It’s hard to believe per head losses of $190 U.S. but that’s the arithmetic.
Consequences:
The losses in China per head are the highest ever experienced anywhere at any time. It’s uncharted water, the latest data we saw was China marketing 13 million hogs a week. Farmer Arithmetic 13 million at $190 U.S. per head loss is an industry going backward just about $2.5 billion a week. Maybe too high but take a billion off and it’s still almost incomprehensible. The one guarantee in the hog industry when producers lose money sows get liquidated. When producers lose lots of money lots of sows get liquidated. China losing lots of money.
2022
In 2022 we see fewer hogs in Europe and China. In USA the USDA inventory indicates 6% fewer hogs beginning 2022. The USDA September 1 inventory report had 2.318 million fewer pigs under 120 lbs. than a year before. If we use 16 weeks to get from birth to 120 lbs. 2.318 million that’s 145,000 less hogs per week. A big number.
Summary 2022
Our thought is price will rebound with vengeance as Global supply declines in 2022. Lean Hog futures USA currently undervalued. The dog is going to hit the end of the chain. It’s not if but when.