Friday, March 29, 2024

U.S. Hog Slaughter Numbers
Remain Strong

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Pork Commentary, August 31st, 2020
Jim Long, President-CEO, Genesus Inc.

The U.S. Packing Industry continues to ramp up slaughter numbers. Last week 2,664,000 up almost 200,000 head from the same week a year ago. We have to commend the Packers for adjusting to Coronavirus challenge and getting hog slaughter numbers up significantly.

One of the issues spoken more than once at National Pork Industry Conference (NPIC) was the pricing of market hogs in the future. Most if not all that spoke believed that current hog pricing programs need adjusting. Some touted the new plan to have pork cut-outs futures on the Chicago Board of Trade. This was mostly touted by the people selling futures.

Certainly, the push from NPIC speakers was that U.S. Pork cut-outs and a percentage of such would be a reasonable option for the future. One of the speakers said long term average of hog price to cut-outs was 88%. If we use that today and Friday’s cut-out-close of 71.39 the 88% hog price would be 62.82¢ lb. National 53-54% hogs 56.10¢ lb. Most of the time in the last months an 88% cut out to hog price spread has been lower and a detriment to producers.

For hog producers, whatever we are doing for hog pricing has not been working very well. From what we can see looking at hog prices throughout the world USA-Canada have the lowest global hog prices and worst financial situation. We as an industry must ask why? What needs to be changed? Is it just too many hogs? Coronavirus?

One Packer asked us in January “If the industry is hurting so bad, why is their expansion?” – good and fair question. Since then we believe expansion has stopped. There are next to no new sow units being built in the USA; there is liquidation of the sow herd – we believe at least 250,000 is gone and/or is ongoing. The marketplace is adjusting, but still, we ask why does USA-Canada have the lowest prices in the world?

NPIC

At NPIC Nick Giordano Vice President of the National Pork Producers Council (NPPC) spoke on current legislation for Gene-Editing (GMO).

As he explained current U.S. Gene-Editing (GMO) oversight is by the United States Food and Drug Administration (FDA). Mr. Giordano explained that currently Swine for Gene Editing is classified as “Living Animal Drug” and a Hog Farm using such would be considered a “drug manufacturing facility”. 

The European Union (EU) has classified Gene-Editing as Genetic Modified Organism (GMO) and have effectively made it illegal.

Mr. Giordano didn’t mention the EU part but he said Argentina, Brazil and China were working on Gene Editing. Not sure where Argentina comes in re Gene Editing (GMO) as they have very few hogs and no swine genetic companies. Brazil? China probably as PIC has signed a cooperation agreement with a company there, after the EU ruling.

PIC has invested millions of dollars in trying to get a GMO pig to market. They probably don’t appreciate Mr. Giordano explaining that today it’s classified as a “Living Animal Drug”. What we can figure when they tout to customers the opportunity to being first in line to get PIC’s GMO pig they aren’t mentioning “Living Animal Drug” or your farm becoming “a drug manufacturing facility”, sounds like fun.

Wonder which Retail Chain and or Foodservice will want to be first to sell Living Animal Drug – GMO Pork. Animal Welfare Groups would make a fortune fundraising on this. Sounds like suicide consumer marketing for all Pork producers. We appreciate Mr. Giordano’s frank and legal description (he’s a lawyer) of the reality of the Gene Editing (GMO) as he recognised the challenge to “Consumer Acceptance”. It’s good to see the money invested in NPPC is pointing out the perils of technology that could damage our industry and crush Pork consumption.

The best option for our industry could be to embrace new vaccine technology, not GMO. Will not be negative to consumers, retailers, foodservice, and exports. We need to do everything to increase Pork demand we don’t need impediments in place that encumber this quest. We need to use smart options.

In Feedstuffs a report that University of Connecticut assistant professor of animal science Young Tan and professor of pathology and veterinary science have now identified compounds that successfully use a vaccine to block the PRRS Virus. You can read the entire article here https://www.feedstuffs.com/nutrition-health/compound-blocks-prrs-virus-identified

Genesus News

Get acquainted with the Global Mega Producer 

A program of recognition led by National Hog Farmer and sponsored by Genesus Inc.

New Fashion Pork, USA

New Fashion Pork is once again part of the Global Mega Producers for 2020

From its beginning in 1998 a lot has changed for the company. Today operations extend from Wyoming to Indiana with International business diversity. Having a sustainable strategic plan, Land/Crops, Nutrient supply and Pigs, has always been a company goal.

Today 30% of the company needs are supplied within. Maintaining and achieving high health herds is also part of the plan. 

“Our employees are the reason we have been successful. I cannot imagine another group that has preformed at their very best with all of todays happenings”
– states Brad Freking, Owner NFP. 

Let us congratulate New Fashion Pork for being part of the Global Mega Producers.

Tom Stinson, Director of US Sales, Genesus Genetics (right) and Brad Freking, Owner NFP (left)

NPIC Observations

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Pork Commentary, August 24th, 2020
Jim Long, President-CEO, Genesus Inc

NPIC Observations 

The National Pork Industry Conference (NPIC) was held last week as a virtual event. Not an ideal way to do conferences as the huge benefit of personal interaction is missed. Fortunately, the NPIC organisation did a good job executing the conference under the circumstances that today’s reality forced them too.

Thanks for many of you who watched my talk on NPIC site and YouTube. 

  • Appears from a couple of the speakers they believe hogs are still backed up in the millions. 
  • Steve Meyer with the Brokerage Firm Kerns and Associates projects an increase in hog slaughter in 2021 vs. 2020. (2020 = 130,646 vs 2021 = 131,739)
  • Steve Weiss one of the principles of NPIC (Century 21) and CEO Nutriquest indicates their data has breakeven top 25% producers 63-65¢ lb. lean (upper Midwest).
  • Steve Meyer said that the extra sow slaughter this year of 220,000 more year to date, does not indicate significant sow herd reduction.
  • Meyer’s spoke of Maxwell Foods 54,000 sows and Hitch Pork 15,000 sows being liquidated.
  • Meyer’s explained CME average price for 2021 is currently 68.37. Kerns and Associates believe the average price in 2021 will be 56-59. Meyer recommended producers consider some hedging. 

There were several other speakers with the NPIC conference. Next week we will discuss some of their thoughts.

Other Observations 

Sow Mortality Analysis 

We have looked at sow mortality and how it could affect the breeding herd inventory. We looked at Pig Champ data which is available on the Pig Champ website. Annual sow mean mortality in 2015 was 8.94%, in 2019 was 12.31% – an increase of 3.37%. If breeding herd is 6.3 million, the extra 3.37% equates to 212,310 sows a year or 4,000 extra dead sows a week. Kind of skews the analysis of historical sow liquidation to decide the current degree of herd liquidation. 

Hog Slaughter 

Hog slaughter this past week was 2,618,000 a year ago 2,531,000. Daily slaughter capacity is about 500,000 with some days now reaching 480,000 plus. Excellent Packer Gross Margin has been a great stimulus to get hogs killed. Now maybe with less lucrative unemployment benefits the labour force for all plants will move towards capacity helping production. 

National Daily Base Hog Carcass Weights first 4 days last week averaged 206.80 lbsthe week before 208.01 lbs.; year before 208.48 lbs. If hogs backed up in millions as some claim it will be first time in history backed up hogs have lower slaughter weights. 

Producing Better Pork 

As an industry we are obsessed with costs, not necessarily a bad thing. What we see very rarely, if any talk, on how to grow our business by increasing per capita consumption, where chicken industy has relentlessly increased consumption and stayed mostly profitable, the pork industry profit seems to come only when we cut cost production. Every consumer survey ever done shows taste, flavour, and eating experience are the main driver of consumer satisfaction and repeat purchasing. Instead, we focused on the stupid White Meat Program that drove us to produce Pork that tasted like cardboard. Is it any wonder bellies, ribs, and shoulders (most fat) now dominate the cut-outs while loins and hams lag in value.

The solution is not using a so-called Duroc; it is using Durocs or whatever breed that has marbling-colour–PH that will deliver the best eating experience. Some so-called Durocs will never deliver the eating experience as they themselves have been bred to be really lean and have no better eating attributes then the synthetic breeds the other White Meat Program spawned.

We need to stop being farmers and become marketers, we need to produce a better eating product that will drive price and demand. Playing only the cost game is why per capita consumption for pork has flatlined for 25 years while total meat consumption has increased. We have lost market share. There is a calculation that if every American ate pork one more time a month that is equivalent to 7 million hogs per year. We as an industry pine for more exports maybe the answer is producing a better tasting product and growing our domestic market.

More hogs in 2021? 

Projecting more hogs in 2021 than 2020 – interesting perspective. We don’t agree, liquidation is underway. Sow slaughter since first of year up 7,500 a week from a year ago. Sow herd on June 1st was down nearly 150,000 from Dec 1st. There has been continued liquidation since then, ie. Maxwell Foods and Hitch – they alone are 1% of the U.S. sow herd. We believe higher sow mortality due to the weaker genetics that has been introduced from Europe is also contributing to liquidation as gilt retention has declined. We believe without hesitation the U.S. will have fewer hogs in 2021 compared to 2020. How much less is too early to project as the sow herd continues to liquidate. Financial losses have been significant and continue.

Get acquainted with the Global Mega Producer 

A program of recognition led by National Hog Farmer and sponsored by Genesus Inc.

Christensen Farms, USA

Christensen Farms has again been recognized as a Global Mega Producer for 2020. One of the largest family-owned pork producers in the United States, Christensen Farms, relies on the dedication of employees, contract farmers and producing partners. 
 
Christensen has 142,500 sows in production in multiple states. The company will only add production if it fits into their integrated model. Dedicated to providing wholesome, safe, nutritious food around the world has made Christensen a world leader in pork production. 
 
Christensen is part of the Triumph Foods Group.  
 
The company continues to look for diversity that fits their goals and value system.

“I want to thank all our employees for their dedication to our industry” 
– states Greg Howard, VP of Strategic Planning, Christensen Farms. 

Let’s congratulate Christensen Farms for being a Global Mega Producer.

Greg Howard, VP of Strategic Planning, Christensen Farms (right) and Tom Stinson, Director of US Sales, Genesus Genetics (left) 

National Pork Industry Conference

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Pork Commentary, August 17th, 2020
Jim Long, President-CEO, Genesus Inc.

Jim Long's Pork Commentary

This was to be the week of the National Pork Industry Conference (NPIC) at the Kalahari Resort Wisconsin. Instead due to Coronavirus, it has become a virtual conference.

Genesus has been a lead sponsor for twelve years. In that time, we came to appreciate the excellent organization and speakers of the NPIC. This year most importantly we will miss the interaction of the many people at the conference. At the NPIC and other like events we have come to meet and get to know many of the people in our industry. It has enriched us with the knowledge we have learned from these interactions.

As an industry, the pandemic has not only hit many financially, but it has prevented the events such as NPIC that binds us personally in relationships to our industry. We are all diminished by this reality.

As part of NPIC this year, we gave a 19-minute presentation on our feelings on the Global and U.S. markets. Please find below our presentation. 

Available in English language only

Genesus Global Market Report Canada, August 2020

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Genesus Global Market Report

Bob Fraser – Sales & Service, Genesus Ontario
bfraser@genesus.com  

In my last two commentaries I’ve suggested the industry was a mess, maybe even a hot mess. What can I say now other than we’ve either got used to it or have become numb?

Carrying on from my table last commentary of Ontario Pork’s weekly reporting of the average, low and high total return to producers per 100 kilograms dressed weight.

DateAverage Price per ckg DW Total ValueLow Price per ckg DW Total ValueHigh Price per ckg DW Total Value
July 19, 2020$174 $131$240 

You can see the spread now extends to over $100 per hog. Resulting in some producers maybe thinking they should expand to producers bleeding to death by a thousand pin pricks, across the road from each other. I would question whether the spread has ever been this wide. All this as shown above with 25% of the global sow herd gone, primarily from ASF causing prices pretty much everywhere other than North American to be at historical highs.

So, if this isn’t broken, I don’t know what is. Andrew Heck, Editor of Canadian Hog Journal does an excellent job in their Summer 2020 magazine of highlighting some of the issues in his article “Producer-packer tensions threaten viability.”

In mid-May the pork producer organizations in B.C. Alberta, Saskatchewan and Manitoba issued a joint invitation to executives from Maple leaf Foods, Olymel and Donald’s Fine Foods to have an open frank discussion on the state of the industry, and work to solutions that generate shared value for producers and processors. Part of the written invitation reads:

“As a result of our flawed value sharing system, pig producers in Canada have needed to rely on the goodwill of the federal and provincial governments and taxpayer dollars to support producers’ very survival.” It continues, “For too long, the producer and packer have been at odds with each other, and it has created an unmanageable and antagonistic relationship that is weakening the industry and the brand in the global marketplace. This approach must come to an end.”  

source: “Producer-packer tensions threaten viability”, Canadian Hog Journal

I think most producers would agree with the synopsis if taking exception to the extent of government goodwill helping them. However, although a commendable effort, in a capitalist system with packers making previously unimaginable margins it will be challenging for them to see a lot wrong with this present picture. Even when some in their midst understand killing your supplier is ultimately bad for business. Similarly, as many producers are fighting for survival difficult to take “the long view”. I believe the saying is “when you’re up to your ass in alligators, it’s hard to remember your original intention was to drain the swamp.” 

But now would seem the very time for vision for the industry. In the past, the one solution to this conundrum between the packer and producer has been for the packer to integrate down. Although more extensive in the US in percentage terms perhaps not that much different in Canada.

  • Olymel along with being Canada’s largest pork packer is Canada’s largest pork producer and appears to wish to integrate even further. If not, full integration at least sell producers genetics, feed and perhaps other inputs for them to gain shackle space. Giving with on hand, while taking away with the other.
  • Maple Leaf Foods, although having some ebb and flow to being a pork producer, remains a large pork producer in Canada.
  • HyLife although starting as a pork producer with their Neepawa pork plant, the acquisition of 75% of Prime pork plant in Minnesota and the 37,000-sow pork production of ProVista in Manitoba appears their model is an integrated one.

Such that would be difficult to tell which tail is wagging the dog. 

An alternate solution is for the producer to integrate up. As with Conestoga Meats/ Progressive Pork Producers (3P) here in Ontario. Right now, they appear “the smartest guys in the room” as they share in the value of the hog with enviable margins compared to many producers in the province. However, this model requires overlooking the better part of a twenty-dollar bill they put on the back of every hog for ten plus years

Which is the better model? Don’t know that there’s any convincing evidence that packers make better hog producers than hog producers. Anymore than producers make better pork packers than packers. Most economic theory would suggest the greatest prosperity comes from all the players sticking to what they’re best at. That being said the old way of producers and packers taking turns making and losing money no longer seems sustainable. Particularly when the playing field appears tilted against producers perhaps permanently.

Pork producers have proven themselves to be extremely resilient and innovative amongst agriculture producers. Appears time to think BIG! 

Again Bob Hunsberger, Wallenstein Feeds, Hog Economics Summary Sheet shows little in the way of encouragement or change from eight weeks ago, profitability going from per pig with average production loss of (-$37.90) to loss per pig with an average production of (-$30.23). A $7.67 per pig increase in revenues that for some at least only says “you’re not bleeding as fast”. Then with the next twelve-month projection moving from (-$6.52) to (-$5.11) – arguably moving in the right direction but hardly comforting. Seems time for a better mousetrap.

Click image to enlarge

Global Mega Producer Exits

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Pork Commentary, August 10th, 2020
Jim Long, President-CEO, Genesus Inc.

Jim Long's Pork Commentary

Global Mega Producer Exits

Last Friday it was announced that Goldsboro Milling – Maxwell Foods would be exiting the Swine Industry. A year ago, at this time Maxwell Foods was a Global Mega Producer with 100,000 sows. Last August 19 Maxwell sold about 46,000 sows and production contracts to Country View Farms whom are part of the Clemons Food Group.

Maxwell has announced that it will begin phasing out current production of about 54,000 sows beginning August 6th. See link below.

Maxwell Foods Permanently Closing Hog Production Operations

This is unprecedented in our industry. We understand most if not all breeding of sows has stopped. 

“To breed a sow is to believe in tomorrow.”

There has never been a liquidation plan of this magnitude by one entity in the U.S. swine industry history. It appears that there were no buyers for the business. In the past when large producers such as Maxwell had an exiting plan another large producer took them over. IE Smithfield Foods – Murphy, Carrol, Premium Standard. Maschoff – Sands, Christiansen – Heartland, JBS – Cargill and so on.

Maxwell Foods continues to be a major shareholder in Butterball Turkey. The exiting of Maxwell from the swine industry is in our opinion a real reflection of the financial losses our industry has been enduring. Be real sure they aren’t quitting because of making too much money. When we hear from independent producers that the “Big Guys” aren’t being hurt by our negative margins we always disagree. The more hogs you have the more you can lose. There is no magic in the business, Maxwell wasn’t directly involved in the packing plant. They were like a big independent producer. Let’s say selling 25,000 hogs a week times $30 per head loss = negative $750,000. At some point you might ask “What’s the future?” If you don’t see one. Stop breeding, exit stage right.

54,000 sows equal about 1.2 million market hogs per year, almost all currently to Smithfield Foods. If one needs confirmation sow herd liquidation is ongoing this is it. Who knows if this market continues as is who might be the next large entity to stop breeding? To assume there won’t be is reckless.


Other Observations

If slaughter weights and field reports from our customer base are an indication, we believe few if any hogs are backed up. Our opinion is far different from the commodity traders and vested interest that say “3 million hogs backed up” a crude but effective way to depress hog prices.

Despite the best efforts of the vested interest to continue to hype huge pork supply. Cut outs were $73.84 Friday. Lean Hog futures even showed some life Friday with a significant bounce.

Pig Production is decreasing. From Dec 1st to June 1st, 150,000 fewer breeding sows. June sow slaughter 52,000 more than last June. We are aware of several farms beyond Maxwell Foods that have decided to exit. Euthanization, sow herd abortions & lower gilt retention are all factors in decreasing the pig production. June 1 USDA report projected 5% less farrowing in this time frame. That is about 150,000 less pigs a week. We are being offered empty barns both nurseries and finishers. The hog supply is dropping. Barns are becoming available. When does price increase? When the market realises there are not millions of hogs backed up. When is that? Hopefully sooner rather than later.

“Surest cure for low prices is low prices!”

Potential PRRS Game Changer

In Feedstuffs a report that the University of Connecticut assistant professor of animal science Young Tan and professor of pathology and veterinary science have now identified compounds that successfully use a vaccine to block the PRRS Virus. Click below to see article.

Compound that blocks PRRS virus identified

If this technology is effective this has huge ramifications in the future of our industry. Unlike Gene Editing (GMO) being done by companies like Genus – PIC which face huge regulatory and consumer acceptance of GMO food. No one has much issue with vaccines. Vaccines can be available to the world industry unlike a GMO Pig which will have huge restrictive, cost and litigate issues beyond consumer acceptance.

We can only imagine the fear at companies that have invested 10’s of millions to produce a GMO-PRRS resistant pig to see the vaccine option potentially destroy the value in the GMO technology investment.

At the end of the day, we need to produce Pork that consumers will feel comfortable with. GMO pork has been banned in Europe. Not sure GMO pork is a direction that will drive consumer demand in North America. A vaccine is a real solution that doesn’t collide with consumer or regulatory issues.

Lean Hog Prices Gain Strength

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Pork Commentary, August 4th, 2020
Jim Long, President-CEO, Genesus Inc.

When you are an optimist you look for the positive. Last week, Thursday to Thursday U.S. National Base 53-54% lean hogs went up from 48.79 to 53.27. Still a miserable price but going in the right direction.

“I am an optimist. It does not seem too much use being anything else.” – Winston Churchill –

Other Observations

  • One of our U.S. customers got offered 10¢ a lb. more for this past Saturday’s delivery compared to the week before. This for spot cash delivery.
  • Three of our customers in Northern Midwest are no longer backed up with hogs as of last week. Good sign.
  • Some customers have pulled hogs down to a 265 lb. average in preparation if there are plants slow down due to coronavirus. Of note, their plants had room to get hogs to this Iowa weight.

From the feeder pig world

More calls coming in by buyers. Buy lists more than supply list in some instances. Probably a sign of market price floor. Current early weans are February market hogs. Pig supply is being cut due to sow herd liquidation from higher sow slaughter (+180,000 Jan-June), lower gilt retention, euthanization of small pigs and some planned abortions. Also, demand is being enhanced by more finishing barn space being made available by higher market hog slaughter.

We expect we are seeing the beginning of a relentless increase in small pig prices over the next few months as supply continues to decline.

“I’d rather be optimistic and wrong, than pessimistic and right.” 
– Elon Musk –

Hogs backed up

The multi-million-dollar question that hangs over our industry is whether hogs are backed up by over 2 million head as some claim or are we close to current.

The prevailing consensus it appears is that 2 million are backed up. That belief hangs over the market. Every Retail, Foodservice and Foreign buyer reads the pork news. The drumbeat of the hogs backed up takes away any stimulus for any buyer to worry about pork supply. This in itself limits any market price momentum.


We watch market weights. Last week, the first four days of the National Daily Base Hog Slaughter report had an average carcass weight of 207.56 lbs; the week before averaged 210.46 lbs; same week a year ago 208.28 lbs; June this year averaged 213.41 lbs.

Our observation, it would be the first time in history that hogs are backed up significantly and hog weights are below a year ago and falling weekly.

We have written to watch slaughter weights and many do, but most focus on the Iowa–S.Minnesota weights. That is if there were hogs backed up is where they are regionally. We watched the National weights as it’s in our opinion gives more of the national picture. We believe there are hogs backed up at some farms but also farms that have pulled hogs ahead. The net effect is what matters.

This coming week if Packers driven by excellent gross packer margins keep up slaughter numbers of about 200,000 more a week then a year ago, watch the weights, if they continue to plummet the likelihood of massive numbers of backed up hogs is less likely.

“To breed a sow is to believe in tomorrow.”

Government’s responsibility is to ensure proper food supply for its citizens. In the time of this pandemic, this has been a challenge for not only the government but retailers, packers, and producers. The drumbeat of attacks on the meat industry by a couple of prominent east coast Senators (NJ, Mass.) has been steady (both states are far from food self-reliant). This has led to some retorts from Tyson and Smithfield on how they are dealing with the pandemic.

Packer Sentiments from Bloomberg articles

Tyson Foods

“As we look beyond this year, we’re prepared to navigate prolonged pandemic related uncertainty … We are investing in operational flexibility to ensure that we can continue to meet customer demand, while living in a potentially long-term COVID-19 environment.” said Noel White, President & Chief Executive Officer at Tyson Foods

Sunday’s spread echoes a national Tyson Foods Inc. commercial with the tagline “We take care of our family so you can feed yours.”

Smithfield Foods

Smithfield Foods Inc. took out a full-page ad in Sunday’s edition of the New York Times to accuse its critics of false narratives and misinformation and to defend its operations to keep the nation fed during the pandemic.

The Virginia-based company calls its 42,000 employees “heroes” in the ad, and says it has implemented measures to keep staff safe and reward them for their work.

The ad accuses others of trying to use Smithfield and its industry as “political pawns,” while the company has stayed apolitical to make hard decisions and confront challenges that are “rooted in responsibility and delivered with integrity.”

“We must produce food, and someone has to do it,” the Smithfield ad reads. “Certainly it is not the critics who have answered the bell. No, it is our nation’s food and agriculture workers who have done so.”

As producers we need all slaughter plants to be operational. Any attempt to slow down the plants by politicians is a direct assault on our livelihood and future. All producers should stand with packers to ensure maximum packer capacity. Our livelihoods matter.  

“I am too positive to be doubtful, too optimistic to be fearful, and too determined to be defeated.”

U.S. Sow Slaughter Continues to Accelerate

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Pork Commentary, July 27th, 2020
Jim Long, President-CEO, Genesus Inc.

June U.S. Sow Slaughter was 294,500, up from last year’s 241,900 – that’s 52,000 more sows gone to market in June compared to a year ago. Year to date U.S. sow slaughter (Jan-June) is 1,678,600, up from last year’s 1,498,810. – year to date 180,000 more. For those who think the sow number this year is being inflated by overweight market hogs, we offer this year average slaughter weight, Jan-June 304 lbs, last year’s same time frame 304 lbs. 

From Dec 1 to June 1 the USDA breeding inventory showed a decline of 152,000 sows. We believe that what is ongoing is a further reduction of the sow herd. The financial losses of many producers are unprecedented. Current losses of $40 per head on top of already many months of losses are accelerating herd decreases. 

Compound that we are in summer when mortality increases due to high temperatures, while gilt replacements have slowed. All these factors lead us to believe sow herd is decreasing significantly at this time. Fewer sows mean fewer pigs.

U.S. hog slaughter last week was 2,589,000, up from last year’s 2,359,000. Packers have good margins to motivate them to keep slaughter numbers up. Saturday was 231,000 head, a year ago 12,000. We need to work into whatever hogs are backed up and it appears it’s happening. 

U.S. pork cut-outs held last week closing Friday at $70.53. This despite more hogs being harvested.

U.S. pork in cold storage at the end of June was 464,373 compared to 619,454 a year ago. A huge difference. Despite record low seasonal prices, Pork has not gone into storage. Good news if we get any momentum in the market cold storage levels will not slow down a rebound.

Rabobank as the world’s largest agriculture lender has a good handle on what’s going on in the global swine market. Last week they reported that they expect Global Pork Production to decline 8%. “The biggest year-over-year declines are expected in China (-17%), the Philippines (-9%) and Vietnam (-8-11%).”

We would agree with these observations. Genesus has Genetic sales and production in each of these three countries and the decline in production from ASF related issues is significant. If anything, we question if both Vietnam and the Philippines might have even greater declines they observe.

 Rabobank reports “In the United States, live hog prices have dropped 41% year-over-year in early July, as meatpackers continue to work through a backlog of animals that could take months to process. Analysts said market prices for hogs are well below breakeven and could cause some producers to trim their herds or exit the business.”

We note 52,000 more sows in June (180,000+ YTD) to slaughter than a year ago would indicate “trimming”. 

Seems bizarre to us with projected 8% less pork in the world, why the North American Industry is sucking air. Even more bizarre that the 8% decline includes a 1.5% increase in the United States. At the rate things are going with the rapid decline of the breeding herd accompanied by euthanized pigs there will be less U.S. pork in the not so distant future.

“The great thing about rock bottom is that you cannot sink deeper”
– Winston Churchill

A Personal Note

24 years ago, I traveled from Ontario to Manitoba for the first time. I had been asked to speak to the Hutterite District of the Manitoba Pork Board by their director Henry Maendel.

Henry prior to the meeting invited me to the Rosebank Colony where he was hog boss. I had never been to a Hutterite Colony indeed I had never met a Hutterite. That day will be ever etched in my mind as Henry who had a very strong personality showed the workings of Rosebank. The church, housing, hog barn, shops, land and kitchen. All very impressive. I remember the dinner we had duck; it was good. The ladies who cooked the dinner watched us. We talked and I ate slow. At that time, I didn’t know eating slow isn’t what you do. I wondered why the ladies kept staring, later I learned they wouldn’t leave until we were done. Lesson learned. 

Later Henry told me about the history of the Hutterite Community. A religion-focused in the early 16th-century agrarian-based communal living and common ownership founded by Jacob Hutter as part of the Anabaptist movement of the reformation. He told me the 500-year journey to where today there are over 400 colonies in the USA and Canada. It was an enlightening and memorable day for me.

Unfortunately, Henry Maendel passed away last week. I pay tribute to Henry as a powerful personality who embodied the Hutterite religion and culture. Since first meeting Henry I have come to know many Hutterites as friends and customers. In the 24 years, I have come to admire the tremendous will and dedication it takes to maintain a distinct community and culture. 

Henry was an impassionate leader of the Manitoba Pork Industry. A number of years as director of the Manitoba Pork Board he pushed for producers’ interests. At his passing, he was overseeing as Hog Boss the building of a new swine barns at Rosebank Colony. A continued belief in the future of the swine industry. 

Our condolences to Henry’s Family and all at Rosebank Colony. May he rest in peace.

Lockdown drives uptick in home cooking

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By Sharman Hnatiuk

COVID-restricted home baking and indoor cooking has turned into backyard BBQing as the weather has warmed up.

Since the start of the COVID-19 pandemic, one message has remained the same: home is the safest place to be. As a means to combat home confinement, coupled with a reduction in restaurant and take-away dining options, one thing is certain: Canadians are spending more time cooking.

Today, most Canadians have access to more than 250 hours of cooking or food-related shows a week on television. YouTube offers an endless supply of cooking demonstrations and videos produced by everyone from home cooks to celebrity chefs, and during the COVID pandemic, the demand for online culinary inspiration has been increasing across web and social media platforms.

Celebrity chefs provide encouragement

Social media has allowed Anna Olson to keep inspiring Canadian home cooks during the pandemic.

Since the March 2020 onset of the pandemic, Chefs Anna & Michael Olson of Welland, Ontario have both increased their online presence with regular social media videos. As a celebrity chef with cooking shows viewed around the world, Anna has seen a dramatic spike in followers to her YouTube channel, “Oh Yum with Anna Olson,” mostly from people searching for baking recipes.

COVID restrictions have impacted options for Canadians that were accustomed to eating out or ordering take away a few nights a week, leaving many searching for new recipes to add to their previously limited repertoire. For many, the excess of time at home is proving to be the perfect opportunity to getting their hands dirty in the kitchen and expanding their culinary skills.

“We have a lot of time to think about food; it is no wonder that people are digging out those unused cookbooks and looking for inspiration online,” said Anna. “With absolutely no social commitment, the math is clear: there are seven dinner opportunities each week to try something new.”

For the past two decades, Michael has made a career out of inspiring young chefs as a Professor at Niagara College’s Canadian Food and Wine Institute. Through his cooking demonstration videos, Michael has attracted increased interest to his Instagram feed for his ‘keep it simple’ approach to cooking.

“I’m very sensitive to showing how to make something in the kitchen or on the grill that is not overly complicated, expensive or includes hard-to-access ingredients,” Michael explained. “With excess time at home, I think there are a lot of people trying to embrace and overcome cooking as a chore. The last thing anyone needs right now is to feel inadequate.”

Michael Olson’s popular all-pork cookbook, Living High Off the Hog, was published in 2019.

Last year, when Michael launched his all-pork cookbook Living High Off the Hog, he was adamant that all of the recipes in the book were achievable to any home cook with access to the ingredients and enough time. In November 2019, Alberta Pork even gifted the book to guests during the organization’s 50th anniversary celebration, and Ontario Pork has been actively promoting sales.

As the COVID response continues into summer, the search for something new to bake or cook has evolved into something new to BBQ or smoke.

Summer plans go up in smoke

Being housebound has not limited Canadians from shopping online, and BBQ stores across the country have reported increased sales of smokers and grills.

“I keep hearing, ‘I got a smoker,’ or I get questions through social media about pellets or smoke,” added Michael. “COVID has provided an excellent opportunity to learn something new, and staying close to home presents the perfect opportunity experiment with learning to smoke meat. With all the excess time, and BBQ season upon us, why not spend money on something you can enjoy at home?”

In the early days of the pandemic, panic-buying of both fresh and non-perishable goods left grocery store shelves empty. A Food and Consumer Products of Canada survey released in early April reported that leading food and consumer goods manufacturers experienced an all-time high in the last two weeks of March, representing a 500 per cent increase in demand.

While many restaurants have struggled during the pandemic, business is booming for small butchers like Edmonton’s Corey Meyer, who now wears a mask while working.

For Corey Meyer, third-generation butcher and owner of ACME Meat Market in Edmonton, business has never been better. While his butcher shop survived the panic-buying early days of the COVID response, things have returned to a newer sense of normal, but sales remain high.

“More than ever, there seems to be an emphasis on supporting local producers and businesses during the pandemic,” said Meyer. “We enhanced our social media presence in recent years to attract a younger clientele to the shop, but COVID has certainly brought new faces making a conscious effort to support local.”

The summer BBQ season is always popular at ACME, but this year is the highest volume the butcher shop has ever seen since being founded in 1921.

“People are spending more time at home watching cooking shows and cracking open cookbooks, and it is resulting in more customers, more frequent shopping and requests for new or different cuts of meat,” Meyer added.

A renewed sense of culinary appreciation

Even as the COVID situation continues to evolve and restrictions are lifted, many will continue to carry on with newly developed cooking habits as a new normal.

Canadian consumers accustomed to paying restaurant prices are learning the value of quality local cuts at their grocery stores and butcher shops. Armed with new confidence in the kitchen, many have learned how cooking at home can help save money, help their families eat healthier and, perhaps most importantly, help their families spend time together.

“Years from now, people will remember the time they spent together during the pandemic, and many will be talking about the food they ate,” said Michael. “They’ll be telling stories about sourdough bread mom made for the first time or those BBQ back ribs – the best they ever had – that dad made.”

For Anna and Michael, the two believe they have never been closer or more in love than during their confined time together since COVID restrictions started in Canada.

“Children will remember this time differently than adults. Hopefully they are the ones to remind us of the importance that making food and eating together played during the pandemic as we go back to our functioning lives,” said Anna. “I hope that in six months from now, or as long as it takes for things to start to normalize, Canadians are still taking the time to cook together and sit down to eat as a family.”

Governments work to curb farm trespassing

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By Treena Hein

Growing calls for anti-trespassing laws to protect producers

The Government of Alberta took swift action last year following the invasion of a turkey barn. Premier Jason Kenney showed his support in a press conference hosted at the affected farm.

In December 2019, CTV News reported that 11 animal rights activists had occupied a pig breeding barn in Saint-Hyacinthe, Quebec “demanding full access inside the agri-business operation and a meeting with Quebec Premier Francois Legault to discuss animal rights.” The activists had entered the barn before dawn, and they kept a live video stream going of the entire event on social media.

Earlier last fall, this barn occupation was preceded by an incident near Fort Macleod, Alberta, where 30 activists entered a turkey farm. This spurred quick action by Alberta’s provincial government, which passed the Protecting Law-abiding Property Owners Act and brought it into force in December. Last year, Saskatchewan also strengthened its anti-trespassing legislation, but the changes have yet to come into force.

The Alberta law provides more protection for “law-abiding property owners” from civil liability related to injuries to trespassers where the owner has reasonable grounds to believe the trespasser is committing, or about to commit, a criminal offence. The law also boosts the consequences for trespassers, increasing maximum fines to $10,000 for a first offence and $25,000 for subsequent offences, along with possible prison time of up to six months. It also includes a maximum fine of $200,000 for corporations that help or direct trespassers.

In the view of national animal welfare advocacy group Animal Justice, however, this law “seeks to intimidate people who want to call attention to animal abuse.” Executive Director and lawyer Camille Labchuk added that “Alberta’s ‘ag gag’ law violates the Charter protection for freedom of expression, because it prevents whistleblowers from exposing unethical and illegal acts on farms. It is my view that Alberta’s ag gag law will likely be challenged in court.” She points to a letter signed by more than 40 constitutional and criminal law experts, outlining outlines the reasons why similar legislation in Ontario is unconstitutional.

For his part, Patrice Juneau, Communications Director, Quebec Union of Agricultural Producers (UPA), believes that, “When it comes to breaking and entering on farms, these are no longer demonstrations to raise public awareness. Breaking and entering is a Criminal Code offense. These acts aim to impose an ideology through defamation, propaganda, threat and fear. This type of behavior is strongly condemned by society and must be reprimanded.”

Entering and occupying barns, said Juneau, can cause stress to the animals, creates disease transmission and other biosecurity issues, risks the herd’s health status, harms farm business by hampering market access and can negatively impact farm employees and the targeted farm-owning family. They can even affect the insurability of the farm. Juneau added, “Depending on the damage, the costs can be enormous.”

Ontario’s Bill 156 follows Alberta’s lead

Organizations including Ontario Pork have strongly advocated for better protections for producers.

The rationale for the Ontario government’s proposed legislation, the Security From Trespass and Protecting Food Safety Act, is described by the government in safety terms. In the press release, Ernie Hardeman, Minister, Agriculture, Food and Rural Affairs stated: “We’ve heard from farmers who no longer feel safe in their homes, who have expressed concerns with increasing on-farm trespassing and the safety of their families, employees and livestock.”

The Act proposes a first-time fine of up to $15,000 and $25,000 for subsequent offences. It also prescribes “aggravating factors” that would allow the court to consider increased fines and also allow the court to order restitution for damage in prescribed circumstances, which could include damage to a farmer’s livestock or from theft. It also increases protection for farmers against civil liability from people “who were hurt while trespassing or contravening the Act.”

There is also an added dimension in the bill of prohibiting interference with a livestock transport vehicle such as stopping, hindering or obstructing its movement – and the animals in the vehicle without explicit prior consent.

This aspect of the bill no doubt stems from the now-famous event from four years back when a woman named Anita Krajnc was criminally charged but later acquitted for giving water to pigs on a livestock truck in Burlington, Ontario that was heading to a slaughter plant. Krajnc’s group, Toronto Pig Save, held a protest in December against enacting Bill 156.

However, a spokesperson for Ontario Agriculture, Food and Rural Affairs said the government has received hundreds of letters calling on it to do something about trespassing on farms and obstruction of livestock transport trucks. In addition, more than 130 municipalities have passed or supported calls to strengthen protections for these operations.

In mid-June, Bill 156 was passed with support from Ontario’s majority government. The government will continue to seek input on the legislation, as legal challenges from opponents are likely forthcoming.

Other provinces mulling similar anti-trespassing campaigns

In Quebec, the UPA believes similar farm-specific legislation should be passed.

“In the meantime, in February, the UPA obtained from the Quebec Superior Court a temporary injunction to prevent any further illegal intrusions on farms and is looking to render it permanent,” said Juneau. “But this type of legal proceeding can take a long time.”

As in Quebec, there was a protest on a pig farm near Abbotsford, B.C. last year. The 50 activists present claimed to be there because video footage taken previously at the farm demonstrated abuse of pigs. Charges for break-and-enter and mischief were laid against one of the trespassers.

In a statement responding to situation, B.C. Pork noted that while the video “has been edited and lacks context and understanding, some of the scenes are of concern.” Following the incident, a swine veterinarian was sent to the farm to investigate animal welfare.

Talks in B.C. for farm-specific anti-trespassing laws are proceeding. At least one meeting with the province’s Deputy Minister of Agriculture has been held, and another is planned, said Jack Dewit, Chair, B.C. Pork.

He added that, “We do realize that the animal activists are still quietly working behind the scenes as we focus on other things. We need to be prepared should another farm become the target of another protest, and we need to continue working with the authorities to protect producers.”

In eastern Canada a few months ago, trespassing on farms was addressed by Christian Michaud, President, Agricultural Alliance of New Brunswick in an article published in Atlantic Farm Focus. His organization is looking to engage the provincial government and other stakeholders to develop meaningful mechanisms of deterrence against trespassing on farmland and significant penalties for doing so.

“There is currently no legal recourse in this province, because legislation requires the perpetrator to be caught in the act or with ‘sufficient’ evidence,” stated Michaud. “Enforcement has been very weak, leaving producers with no meaningful legal options for protection. The onus of liability or permission remains in the hands of producers.”

Political support for anti-trespassing on the national level

To address the issue on a country-wide level, John Barlow, Member of Parliament, Foothills (Alberta) & Shadow Minister, Agriculture and Agri-Food Canada, has introduced a private member’s bill to amend the federal Health of Animals Act.

The Act currently features nothing to address the impact of trespassers on animal health. This amendment, says Barlow, will make farm trespassing a more serious crime in order to better protect livestock health, but it will also help protect farmers and their mental health. In creating this bill, Barlow wants to recognize the extreme stress faced by farmers who have had to wake up to intruders in their barns.

He further explains that while the bill, if it becomes law, will see increased penalties for groups and organizations who encourage individuals to threaten the biosecurity of animals and security of workers, it does not in any way limit the individual right to peacefully protest on public property.

“We want to send a strong message that entering farm properties will not be tolerated,” said Barlow. “And we want people to understand the risk in terms of disease transmission.”

The bill has gone through first reading, and Barlow hopes it will be debated this fall.

Undercover employees can deceive producers

Activists are emboldened when strong action against them is not taken. Sympathetic journalists use major platforms to mislead the public and spread falsehoods about producers and their partners.

While these new and proposed laws on the provincial and federal levels may do a lot to deter trespassing on farms, none of the legislation touches on prevalence of “undercover employees” – legal trespassing, if you will, by activists who are hired by farmers and later attempt to expose negative conditions relating to animal care through photographs or videos. In Ontario a few years ago, for example, CTV News reported on undercover video taken at a farm, showing questionable pig handling practices.

In the U.S. over the last few years, several state governments have passed laws which prohibit capturing livestock images without farmer consent. Some of these have been challenged, and in Idaho so far, overturned. But even if illegal, attempts by activists to capture images are likely to continue. So, that leaves prevention – in other words, making sure you do not hire activists.

There are many tips available on the internet, but here are a few of the best: Have each applicant sign a document swearing the application is accurate and beware of applicants with things like high levels of education and no ag experience. Require references and follow through to check them, making sure to contact references through their company offices. Do a thorough social media search as well.

In taking on new hires, state in the employment contract that cell phones must be left in vehicles or lockers. Red flags in new hires include being where they should not be, coming in early or staying late for no reason and other strange behaviour.

With care in hiring, adherence to animal welfare standards and further expansion of anti-trespassing laws, it seems that Canadian farmers are becoming better positioned against the risk of waking up to a barn full of protesters. Time will tell.    

U.S. Pork Cut-outs Continue to Strengthen

Pork Commentary, July 20th, 2020
Jim Long, President-CEO, Genesus Inc.

This past week we saw some improvement once again in pork cut-outs. A week ago, last Friday they were $68.95 while on Friday the pork cut-outs closed $71.19. The increase has been 9¢ lb. over the last two weeks. We firmly believe it has to be strength in the pork cut-outs to push hog prices higher. Cut-outs show demand relative to supply. The psychology of the market is one of huge negativity. It’s almost like there is no light at the end of the tunnel. It’s hard to find much if any positivity. The only solace is it’s so bad it has to get better?

Other Observations

  • U.S. weekly hog marketing’s 2,518,000 up 130,000 from a year ago. Packers are getting hogs killed with Excellent Gross Packer Margin being great stimulus
  • 3 area lean hog price went from 07/08 – 42.72 to 45.36 – 07/16. Right direction but dismal price.
  • We expect breeding herd liquidation is ongoing. Sow slaughter is up, gilt retention is down. It would be the first time in history if liquidation isn’t ongoing in the face of losses of $40 plus per head.
  • Last week in Eastern Corn Belt – 3 packers were actively looking for hogs. Doesn’t appear to be many or any backed up hogs there.

China 

  • China’s hog prices continue to stay at a high level. 36.08 RMB/kg or $2.34 U.S. liveweight a lb.
  • Early wean pigs at 100 RMB per kg.
  • China slaughtered 251.03 million hogs down 50 million from a year ago (20%).
  • Inventory end of June 339.96 million head down 2.2% from a year ago.
  • China sow herd is increasing according to the government statistics up 5.4% at end of June compared to a year ago.

The real fact is the hog price $2.34 U.S. lb. liveweight indicates a real pork shortage and strong demand. Rabobank estimates China Pork output will decline 20% this year to 42.6 million tonnes.

China has imported 2.12 million tonnes of pork January – June. Up 140% from a year ago. There is no doubt China will need massive levels of pork in the coming months. The question who will benefit?