Pork Commentary, May 11th, 2020 Jim Long, President-CEO, Genesus Inc.
Last week U.S. Pork Packers started to recover some production capacity lost to Coronavirus plant issues.
U.S. 2-day Harvest – Friday (May 8th) and Saturday (May 9th):
Last week – 554,000.
Prior week – 403,000.
Last year – 449,000
For the week (ending May 9th):
Last week – 1,768,000.
Week before – 1,553,000.
Last year same week – 2,232,000
A gain of 150,000 head Friday-Saturday compared to the same 2 days week before. With Tyson – Waterloo and Logansport, Smithfield – Sioux Falls, JBS- Worthington, plus others coming back online there is hope the daily harvest numbers will continue to increase.
Other Observations
There is no doubt hogs have been backed up.
Probably a couple million hogs at least. Hog slaughter weights going up now in the 221 lb. carcass range. The week of April 10th they were 212.54 lb. A gain of almost 9 lbs., almost 12 lb liveweight up. That is at minimum a week’s worth of hogs backed up (2.5 million?).
U.S. Pork cut-outs
About three weeks ago U.S. Pork cut-outs were 50₵/lb. Some Pork Bellies were at that time, being sold at 30₵/lb. Last Friday skin on 10-12/lb. bellies were $2.96/lb.
Pork Cut-outs closed last Friday at $1.16 – up from 50₵ three weeks ago. That is an increase of $146 per head. Goes to show what happens when supply decreases in a market that has solid demand.
If we use the current National Daily Base lean price 53-54% hogs price of 63.32₵/lb. and subtract that from U.S. pork cut-out of $1.16 we come up with a difference of 53.22₵/lb., times a 220 lb. carcass, we have Gross Packer Margin of $117 per head. As far as we know the biggest spread in history. Certainly, a huge incentive for every Packer everywhere to get hogs slaughtered. An idle plant will be losing money and missing out on huge, huge profit margins.
Farmer arithmetic: a plant with 10,000 head capacity, sitting idle is short at least $1.2 million a day in today’s market.
No doubt there is sow herd liquidation
Latest weekly sow slaughter numbers were 68,409 heads, last year average 57,500. The sow price has collapsed, most in the 15₵/lb. range. Sow packer Margins are probably at record levels. The adage “You only pay what you have too” comes to mind.
We expect U.S. sow herd decreasing at 15-20,000 sow a week range. The combination of sow herd liquidation, less gilt retention, planned abortions, litter size management, and euthanization is certainly cutting the number of hogs coming this fall and into next year. We estimate fall hog numbers could be up to 150,000 less a week than were expected the first of March.
Plant capacity
We have read in several places that there are estimates the U.S. hog plant capacity could be cut by 80% due to Coronavirus operational rules. We question this. We believe some plants are running over 80% now. How are Saturdays factored in this? There is no arbitrary 80% rule, it is just speculation. Time will tell.
We expect American ingenuity driven by opportunity will be yet a huge factor.
Running out of meat is not expected in America
Some Wendy’s have run out of burgers.
Meat sales are being limited by some retailers.
A few states are allowing restaurants to re-open.
Some retail meat counters running out of different meats.
Demand is there, however, the supply of pork, beef, and chicken have all been cut by plant issues. President Trump seems to get it. He invoked the National Defense Act to get plants up and running.
Last week at a meeting President Trump was having with Iowa Governor, Kim Reynolds, U.S. Secretary of Agriculture, Sonny Perdue, was asked for a timeline regarding plants reopening. His reply “probably a week to 10 days where it is fully back up.”
American society is used to getting what they want when they want it. Running out of meat is not expected in America! Let us hope plants get rolling and to capacity.
The financial impact of the current situation for many producers is terrible. This is a resilient industry. Some positives include continued strong exports and obvious domestic pork demand.
Get plants close to capacity, many of the current issues in the market go away.
Genesus Customer Testimonials
Green Acres AB, Canada
“Purebred gilts coming into the herd adapt very well. We are seeing our numbers creep up due to the Genesus F1. We are happy with the service we get from Genesus.”
Brantwood Colony, MB, Canada
“We are still happy with Genesus pig performance. Always getting better. Going on 30 years all Genesus.”
Pork Commentary, May 4th, 2020 Jim Long, President-CEO, Genesus Inc.
The U.S harvested 1,545,000 hogs last week. At least 1 million heads less then it should have. No doubt a real calamity. Too many packing plants closed and others not running at full capacity. The Coronavirus issue is a scourge on the hog industry.
Last Tuesday President Trump mandated the Defense Production Act for Packing Plants. It appears it could give some relief – Tyson Logansport (15,000 per day) announced to reopen this week and the Governor of South Dakota saying Smithfield Sioux Falls (20,000 per day) should reopen soon.
With the backing up of Hogs into the millions of heads over the last few weeks, there has been some euthanasia of pigs and abortions of sows. We have seen pictures of piles of hogs euthanized. We have no idea of the real total numbers involved but for every day hog slaughter is diminished increases the likelihood of ever greater numbers of euthanized pigs.
Once again, we are baffled by the Futures Market. In the midst of a Pork debacle where hogs can’t get slaughtered, June lean hog futures up to $11.18, July up to $9.45 lb. Hopefully, it translates into the cash hog market.
Two weeks ago, U.S Pork Cut-Outs were just over 50¢ lb, Friday they closed at $1.06. A jump of over $100 per head in two weeks! It’s what happens when Pork supply gets cut drastically.
The difference between $1.06 for Pork Cut-Outs and a lean hog market at 56.52¢ is 50¢ per lb. 50¢ per lb. times a 210 lb. carcass – it’s $100 per head gross packer margin. Great incentive if there ever was one for Packers to get plants rolling. Plants sitting idle with all their overhead in place are losing money. Talk about extremes? Producers with a percentage of the cut-outs and who can get them hogs killed are in a group of winners.
The latest weekly sow slaughter was 67,495 heads, last year averaged 57,500 heads. We believe the sow herd is decreasing by at least 15,000 a week. Combination of greater sow slaughter and lower gilt retention.
The latest U.S Pork Exports were 44,700 Metric tonnes (China 20,680 mt.). About equal to 500,000 market hogs of Pork. The ramification, in our opinion, with Pork exports holding at near-record levels and hog slaughter down 500,000 head a week, the decrease of Pork supply is all in the U.S domestic market. We expect the consequence will be some U.S retail stores not having enough Pork to sell. Our society is used to going to the store and getting food when we want it. Empty meat counters will not make happy constituents.
Less Beef also – U.S Cattle Harvest last week 425,000 down at least 200,000 head. Choice Beef cut-outs 373.85 a lb., up by $1.50 in the last couple weeks.
Chicken placement down 8% from a year ago last week (-13 million).
So, what we have is less Pork, Beef, and Chicken all being triggered by Coronavirus issues. Total Meat and Poultry significantly lower. We expect cold storage of all has been ripped down. Our conclusion if the Plants don’t get going the U.S retail meat cases will become next to empty in many places with ongoing rationing to customers. Not exactly a symbol of a system that is working.
The pressure to get plants up and running will become even more extremely intense when empty meat cases become the story on the National news.
Genesus Welcomes Heath Nelson to our team
Genesus is pleased to announce that Heath Nelson has joined our team as Territory Manager for the Dakotas and Montana.
Heath brings to our team lifelong experience in the pig business, having grown up on farm in South Dakota that raised purebred breeding stock. Heath then went on to become a partner in the family farm after graduating from the University of South Dakota.
“We are very happy to have Heath join our team, he has the right mix of experience, attitude and work ethic to very effectively service our clients in the Dakotas and Montana and help Genesus grow our presence in those areas” says Greg Gilsdorf, US General Manager for Genesus.
Pork Commentary, April 27th, 2020 Jim Long, President-CEO, Genesus Inc.
Bad news seems to be becoming worse news. Below some observations:
At the time of writing, hog slaughter plants closed: Tyson- Waterloo and Logansport; Smithfield- Sioux Falls; JBS- Worthington. Roughly combined 80,000 head per day capacity. Other plants are slowed down due to coronavirus labor-related issues. Last week the U.S. harvested 1,995,000 head, probably 600,000 less than there needed to be.
Hogs are backing up at an unprecedented level.
Fewer hogs have led to U.S. pork cut-outs rising at an unprecedented rate as shortage of pork is pushing hog prices higher. Last Friday, U.S. pork cut-outs closed at $77.48. Ten days earlier they were $50.00, a jump of roughly $55 per head. Unfortunately, the hog price gained only about $6.00 per head and is 47₵ a lb.
For Packers that continue to operate, big gross packer margins. Plants that are closed are missing out and at same time paying all their employees not to work. Strange situation. One thing for sure, huge packer gross margins are a big incentive to keep and get plants operating.
U.S. cattle slaughter plants are having similar issues with coronavirus and employees. Last week cattle numbers slaughtered 469,000. They should have been in the 625,000 range.
Chicken slaughter last week was 9 million less birds then same week a year ago.
Put Pork, Beef and Chicken together- Huge meat tonnage decrease. At some point, real government intervention could be needed and soon, to keep food supply system operating and feeding people.
As the hog production system backs up with supply, we understand there are sow units inducing abortions and pigs being euthanized. The degree of these intervention points we are not sure. Early wean pigs are under $10.00 each. It is a mess!
U.S. sow slaughter in March was 283,000, up from a year ago by 34,000 (+ 13%). Year to date up 66,000. No doubt there is breeding herd liquidation.
The U.S. government has announced financial support to Ag for coronavirus related issues. For swine producers, it looks like a cap of $125,000 per entity. Many, if not all think this is insufficient support.
With hog losses for some at $40 per head, it appears to us that it will not do a lot for many. With 75% of U.S. hogs concentrated in 40 producers, the $125,000 cap will do little to stop the bloody losses for that group.
It is sad when you watch the news and see thousands lined up to get food from food banks, while at the same time we cannot get hogs slaughtered. You wonder when the coronavirus testing in New York that shows at least 20% of people had coronavirus titres, how any slaughter plant employee profile can stay negative. It is an impossible task.
Below are two letters. They are a call to arms for every pork producer. It’s a crisis. All need to call and or contact, State Representative, Congressman, Senator, Secretary of Ag, Vice President and President. You need to voice your individual problem and situation; it is more real and not from some Washington Lobbyist. We need to invoke the Defense Production Act. Basically, this cuts through all the red tape and fear of lawsuits, and with this, the President can order the opening of the packing facilities in some way shape, or form. These letters below (click on each to open) can facilitate your talking points when you visit your representatives.
Pork Commentary, April 20th, 2020 Jim Long, President-CEO, Genesus Inc.
The last great debacle the North American Industry had was in late 1998. Market Hogs got to 8₵ lb., too many Hogs for Packer Capacity, the price collapsed.
When the dust settled many of the largest producers i.e. Murphy Farms, Carrolls, Heartland, Premium Standard Farms, Purina etc. had new ownership structure or even bankruptcy. Scale can be a plus but also a curse. Losing $30-40 per head times lots of hogs means lots of money lost.
We have no idea the financial status of the current pork powerhouse group, but we expect there will be some change of ownership and structures over the next twelve months.
The first week of April the U.S. sow slaughter was 67,300, last year averaged 57,500. We estimate to maintain the U.S. sow herd approximately 65,000 gilts a week need to be added. The U.S. sow mortality from various data sets is 1% per month.
In our opinion, the U.S. sow herd is currently contracting about 15-20,000 a week. Last quarter the USDA data shows the sow herd contracted 7400 a week, estimating the current situation, doubling or tripling this number is not extraordinary thinking. At 20,000 a week, the U.S. sow herd would be down on June 1st, 340,000 from December 1st.
We believe the Canadian sow herd is also shrinking.
At some point cutting USA-Canada hog supply significantly.
Coronavirus Curse
The curse of coronavirus continued last week with Smithfield – Sioux Falls and Tyson- Columbus Junction packing plants resulting in about 30,000 a day capacity lost. It also appears the other plants had slower line speed with daily slaughter totals around 45,000-50,000 lower than capacity. No doubt hogs are backing up.
The cut in daily slaughter numbers pushed USDA Pork cut-ups from low 50’s first of week to 60₵ lb. on Friday.
Of Note:
Genesus sales teams in France, Spain, and the United Kingdom all reported last week that slaughter plants working, hogs moving, with hog prices in low 70₵ U.S. liveweight a lb. It’s interesting because all 3 countries have had per capita coronavirus deaths far greater than the U.S.
It appears many contracts for early weans, feeder pigs and even market hogs are being adjusted to the reality of prices, cash flow, and barn capacity. We expect this will continue.
There is talk about pigs being euthanized, not sure it’s happened or will but it is a sign of the current reality that it’s being discussed seriously.
When you review hog marketings, chickens, lower cattle slaughter numbers, there has been a rapid decrease in the total red meat and poultry supply.
Some numbers:
Poultry
Last Week
Year Ago
Young Chicken Slaughter head
155,11
164,410
Chicken Eggs Sets
-5% year ago
Chicken placements
-4% year ago
Chicken National Composite6 lb. bird
50₵ lb.
97₵ lb.
Red Meat
Last week
Same week year ago
U.S. Slaughter Cattle
502,000
642,000
Hogs
2,236,000
2,384,000
What we are seeing is a decrease in total red meat and poultry production. The financial losses will, in our opinion, decrease total protein tonnage in future as all segments cut production.
It’s not hard to calculate close to a $1 billion decrease a week, currently in red meat and poultry sector revenue. The point is this is not just a pork sector calamity, it’s across all protein sectors (including dairy)
We hope a quick recovery from the coronavirus issue can happen. The longer it goes and society stays quasi paralysed, the worst the financial impact on the pork sector and much of the economy.
Health
Some facts about deaths around the world from the World Meter Database January 1 to April 18, 2020
Current World Population 7,788,629,065
Deaths resulting from:
Number of deaths Jan 1- April 18 2020 (Lowest numbers to Highest numbers)
Mothers during childbirth
91,803
Flu
144,474
Coronavirus
156,270
Malaria
291,343
Suicides
318,506
Traffic accidents
400,944
Aids/HIV
499,307
Alcohol
742,874
Smoking
1,484,797
Children under 5
2,257,606
Cancer
2,439,369
Communicable diseases
3,855,866
Other
4,787,428
Total World Deaths
17,470,587
World Corona deaths 156,270 representing 0.89% of total world deaths 17,470,587 year-to-date.
Milltown, MB, Canada
“Genesus sows have an awsome born alive, great weaning weights. Days to market are excellent”
Gadsby North, AB, Canada
“We have been a client of Genesus Full Program for many years and have been very satisfied. The salesman has given us great service. A great team.”
If Misery loves company, we have a real hootenanny* going. (*Scottish word, meaning party)
The Utter Collapse of the U.S. and some other countries’ pork markets is unprecedented. Coronavirus and what it has done to the food chain logistics and demand is crushing.
Random Observations:
Market not working for anyone:
U.S. Pork Cut-Outs last Friday at $52.85.
Integrated packers with own production, in all likelihood, have a breakeven of $70. If correct losses would be in the $36.00 – $40.00 per head range.
Producers farrow to finish losing at least $30.00 per head.
It’s one Ugly Duckling. No one is winning.
The last week of March the U.S. sow slaughter was 67,201. Last year the average was 57,500. We expect we are in the throes of a massive sow head liquidation.
Last quarter (Dec-Feb) the U.S. herd decreased 96,000. We expect a decrease of 150 – 250,000 this quarter. We are already cutting supply of hogs for this fourth quarter.
We expect Canada to also decrease sow numbers in proportion to U.S. declines. Cutting overall supply in the U.S.A-Canada in 2021.
The damage the market price is doing will be hitting all size of producers. We had already started the sow head liquidation last quarter as the industry had been losing money. This will be the death-bell for many.
We expect this Black swan Event to lead to further industry consolidation.
China
China might be a communist country, but they sure can understand capitalism. With U.S. pork at an unexpectedly low price, China jumped in last week to purchase 38,730 metric tonnes. All country sales last week were 55,900 metric tonnes. Both numbers were at historically high levels.
Take home – Everyone loves a bargain and they can use the pork.
China hog price last week was $2.25 U.S. liveweight a lb. China early wean pigs averaging $325. U.S. Also we had more than one report last week that African Swine Fever (ASF) still a big factor. Use of illegal ASF vaccine (ineffective) has compounded the issue.
All indications: China slaughter will decline from here to end of summer, making China’s need for imported pork even greater.
Packing plants
Sioux Falls (Smithfield), Columbus Junction (JBS), and Quebec (Olymel) have all lost days due to Coronavirus in the workers. It will be a challenge to keep plants going.
We suspect all producers are pushing as many hogs to their designated plants as possible, trying to stay ahead of the fear their plant might slow down.
Below, Kenneth Sullivan, CEO of Smithfield sums up reality of Sioux Falls plant closing and what it can mean.
Smithfield warns of food shortages:
April 12, 2020 5:55 PM ET by: Stephen Alpher, SA News Editor
The U.S. is “perilously close to the edge in terms of our meat supply,” says Smithfield CEO Kenneth Sullivan, earlier today announcing the closing of his company’s Sioux Falls processing facility.
That facility alone accounts for 4%-5% of U.S. pork production, and Sullivan notes a growing list of closings of other protein producing plants.
Sullivan: “It is impossible to keep our grocery stores stocked if our plants are not running.”
Sullivan also warns of the “disastrous” consequences up the supply chain once plants stop running, i.e. for the nation’s livestock farmers. “These farmers have nowhere to send their animals.”
We have a stark choice as a nation: “We are either going to produce food or not, even in the face of COVID-19,” concludes Sullivan.
One good thing, we are heading to summer when supply of hogs declines seasonally (usually starts mid-April). This seasonal decline will help in packer capacity effected by Coronavirus and hog-pork pricing.
We should be thankful (really reaching here) that Coronavirus is hitting now moving towards summer hog supply, rather than October-November hog supply.
Chicken Price
Chicken Price has also been affected by Coronavirus.
Last Friday National Composite wtd avg. was 50.51₵ lb.
2 weeks ago, 60.61₵ lb.
March avg. 79.35₵ lb.
A year ago, 96.25₵ lb.
Obviously chicken price has cratered like hogs. A week ago, chicken placements were same as year ago. We suspect the chicken industry will cut chicken placement significantly, as it is almost a totally integrated industry.
Within 5-6 weeks of cutting chicken placements, they can cut supply supporting their price and help alleviating fears of processing capacity slowdowns due to Coronavirus.
We don’t know the cost of production of chickens, but a 6 lb. bird compared to a year ago is $2.70 less, times 150 million chickens, it’s a big difference in revenue. Farmer Arithmetic – over $400 million. We expect chicken production will be cut significantly and fast.
Summary
Hog Losses are big.
Sow herd liquidation is accelerating.
U.S. Export sales supportive at historically high levels.
Packer capacity challenged by Coronavirus. Good we are going into summer with lesser hog supply.
Huge drop in chicken prices will likely lead to quick cut in chicken production.
Springpoint Colony, AB, Canada
“We started with the Genesus Durocs five years ago, we saw tremendous growth in our finishers. Since switched to the Full Geneus Package our total born on our gilts is phenomenal and seeing 14-15 born alive”
Big Bend Farming, AB. Canada
“We have been using Genesus for 10 years now, our packer tells us that they like the consistency they get from the Genesus Program. That’s why we use the Total Package”
Pork Commentary, April 6th , 2020 Jim Long, President-CEO, Genesus Inc.
Lean Hog futures continued to be the pox on our house, creating fear and financial calamity in the swine sector. April Lean Hogs were 66.42¢ on March 24, on Friday, April 3, they closed at 40.22¢. A $50 per head drop in 10 days.
We aren’t lean hog future historians but we would guess this is the largest drop in lean hog future history. The National Daily Base Carcass slaughter 53-54% has decreased from 65.62¢ to 59.59¢ (March 26 – April 2).
Part of the fear of driving the market lower is the thought pork (meat) consumption will decrease due to Coronavirus and slaughter plants will be closed or slowed down. We thought it would be a good idea to look at what’s happening in Europe (Spain) re Coronavirus, slaughter plants and pork prices.
Spain – 3rd largest hog producing country in the world.
Coronavirus deaths in Spain as of Saturday – 251 per 1 million people, in the USA deaths were 22 per 1 million people.
This is a report at the end of last week from Mercolleida, a coalition of Spanish producers, packers, and processors (translated from Spanish).
Packing plants are working well, there are some little problems with personnel.
So far pork prices have not plummeted.
Internal demand for pork is down but export demand is stronger.
One of the safest places in this country seems to be inside a slaughterhouse, whose strict biosecurity measures have now been joined by those specific to Coronavirus.
Spanish integrators are not nervous about the market situation, because it appears no one cancels trucks and they have constant demand.
Price of Pigs in Spain
The historic high was March 5 at 1.54 Euro/Kg. (75.6₵ lb. U.S. liveweight).
Last week on Thursday, April 2 – 1.18 Eur/Kg. (72.65₵ lb. U.S. liveweight).
Not much of a drop. No doubt so far Spain has significantly more problems with Coronavirus than the U.S., with a death rate 10 times U.S. per 1 million people.
So far plants remain open, with good demand for export and with internal pork price stable.
We hope the U.S. can stabilize prices. We expect U.S. consumers will continue eating pork and exports will stay strong.
One other thing Spain doesn’t have lean hog futures to destabilize their market. As my late friend Doug Maus called Chicago “Las Vegas with no rules”. We can only imagine the devastating margin calls the last ten days on many. It’s one thing to lose value in the stock market, but at least you don’t have to cover the decrease with cash immediately.
The lean hog future value collapse we expect was driven by sharpies on Wall Street running computer models and the reality of margin calls eliminating contract holders.
If futures are a true reflection of the market coming i.e. August 54₵ there’s no way May next year will be 64₵. The liquidation of the sow herd by the spring of next year would be unprecedented.
Sow Herd
Last Quarter (Dec 1 to Mar 1) showed a 96,000 sow head decline. The latest sow kill week was 66,500 – last year averaged 57,500 per week. We expect the scenario we are in now will see from March 1 to June 1, a decline of 150,000 – 250, 000 sows.
Someone asked us last week how is the market going to sort? Our reply was, its happening; the sow herd liquidation that is happening will fix any packer capacity issues real soon if we are half-ass correct.
A 6-month decline of 250,000 – 350,000 sows cuts annual production capacity by 5-7 million hogs. Do you think any new financing for sow barns from bankers is going to happen in the next 6 months?
Summary
Sow herd liquidation that began in December will continue but at a faster pace.
We expect consumer pork demand to stabilize and exports continue at record area levels.
Packing plants and all food processing will be challenged by Coronavirus, but whether it’s Walmart distribution centers, pork, chicken, beef, plants, milk or any food processing, society cannot afford the collapse of the food chain due to Coronavirus positives.
China made sure during coronavirus food kept coming, we expect the U.S. will too. There is little choice.
Genesus Welcomes Chad Bierman, PhD
Genesus is very pleased to announce the appointment
of Dr. Chad Bierman, PhD to the position of Geneticist.
As a Geneticist he will oversee genetic improvement programs at genetic nucleus farms, provide leadership for our health R&D program and provide genetic improvement technical support for customers.
Chad has over 18 years of experience in the pig genetics industry in various genetic improvement and research and development roles. In addition to his extensive experience in developing and managing genetic improvement programs, his production and customer support experience will serve him well in his new role.
As a member of the Genesus genetic program team, he will collaborate with other team members, university and government researchers and Genesus technical and sales staff.
“We look forward to Chad’s contributions to our program. His skill set, experience, and desire to develop the best genetics for our pork industry make him an excellent choice for this position. Furthermore, Chad’s Iowa location provides the opportunity to continually engage our US-based genetic program partners and collaborators. Our genetic improvement and R&D programs continue to develop and finding the right people to lead these programs is a key to the future of Genesus” says Dr. Bob Kemp, VP of Genetic Programs and R&D.
Chad holds a Ph.D. degree from the University of Wisconsin-Madison and BS and MS degrees from South Dakota State University. Agriculture has always been part of his life having been born and raised on a livestock and crop farm in southwest Minnesota. Chad resides in Indianola, IA with his wife and children.
Pork Commentary, March 30th, 2020 Jim Long, President-CEO, Genesus Inc.
U.S. Sow Herd Liquidation
The U.S. Sow herd certainly showed significant liquidation in the March 1st Hogs and Pigs Report.
On December 1st, 2019 the U.S.D.A. indicated the U.S. breeding herd was 6.471 million; 3 months later on March 1st it was 6.375 million. That’s a decline of 94,000 breeding animals in 13 weeks or about 7,000 head drop a week.
Go figure, the industry has been challenged to do anything but lose money the last while. We expect that in March similar liquidation levels have continued. It’s obvious as we cut the sow herd the amount of future number of market hogs declines.
March 1st Hog and Pigs Report indicates 4% more market hogs compared to a year ago. About 3 million more in total. When we divide that by 27 weeks (189 days) of the production cycle, it’s about 110,000 more per week. No shortage of hogs for sure.
Projected Farrowings. March-May are projected 100% of year ago, June-August 96%. Maybe a significant sign of what’s happening in breeding herd liquidation.
Year to date sow slaughter is 4,000 more a week than 2019. Also, many herds are not retaining gilts as they usually would and from what we can see, few if any new sow units are being built. With many projects being put on hold, losing money is not conducive to expansion, it leads to liquidation. Always has, always will.
Other Observations
U.S. Pork Exports the week of March 13-19, set a new record. 48,600 metric tonnes. US Pork Exports to China were 23,000 metric tonnes, a new weekly record (a year ago 5,000 tonnes to China). Obviously Coronavirus is not slowing export demand. China Phase 1 Agreement to import more U.S. Ag products (pork) is working. Tyson and JBS removing Paylean is leading to more pork available and then going into China.
Logistic issues in China due to Coronavirus re: importing pork seems to be fixed. We expect U.S. pork exports will probably exceed 25,000 tonnes a week to China for the foreseeable future.
Rabobank estimates China 2020 production will be at least 20% lower than 2019. Current China Hogs at $2.30 U.S. liveweight a lb., is for sure a sign of a pork shortage.
The 53-54% lean hog price gained last week about 4₵ lb., last Thursday it was 65.62. The futures, on the other hand, continued their insane gyrations, dropping limit down in the face of record U.S. pork exports and rising hog market.
All meats got a surge in demand a week ago. Retail consumer buying was hectic. Some Retail stores were stripped of meat inventory. We expect meat consumption will stay strong as many consumers stay home, have time to cook and have the money they used to spend in closed restaurants. Consumers can buy a lot of meat (pork) with what a restaurant meal costs.
Wildcard is to slaughter plants challenged by Coronavirus. All countries up to now have kept food chain moving. So far, the first instances in U.S. plants have been handled and plants kept operating. In Canada, Olymel closed the plant for 14 days.
Summary
Challenging times. It will be a testament to our resolve to keep the pork chain and food chain moving. We expect it will; America, Canada, the rest of the world needs to be fed.
We are essential.
Genesus Customer Testimonials
H.E Trettin Inc, IA, USA
“We have been quite pleased with the quality of the Genesus gilt and the sow she becomes. They are good-tempered animals and excellent mothers.”
Little Bow (F1 multiplier), AB, Canada
“The Genesus genetic line has performed exceptionally well for us. From a sustainable working relationship with the Genesus sales team to a strenuous selection of incoming gilts. We produce a high quality, prolific Fl animal for our Genesus customer base.
The Genesus genetic is high health and pigs thrive from the mothering abilities these sows have. We have very good weaning weights with a 20.9 avg. weaning age. After weaning and a good nutrition in hot nursery these pigs never look back.
We are very satisfied with our average daily gain and our days to market! Our goal is to keep our customers satisfied and we know we can achieve this with the Genesus genetic line! Our personal goal is to reach 30 pigs per weaned sow as a multiplier, and again, we feel that with Genesus Genetics we will achieve that!”
Many conference attendees were unfamiliar with the wild pig problem. As a result, Ryan Brook received a lot of extra attention following his presentation.
Potential for disease transmission, environmental
destruction, physical threats to livestock and other headaches that come with
invasive species are what landowners can expect as Canada’s wild pig presence
continues to grow relatively unchecked. Because they are intelligent, hardy
creatures, eradication has proven elusive.
Ryan Brook delivered the final plenary session presentation
at the 2020 Banff Pork Seminar. His team at the University of Saskatchewan has
been studying wild pigs for nearly a decade, and population trends suggest that
there will be no shortage of further work to do in this area.
“More than 700 delegates who came here to talk about
managing pigs inside the fence,” said Brook. “I’m the only one who came here to
talk pigs outside the fence.”
“Wild boars” were originally brought to Canada in the 1980s.
The current wild pig population is composed of individuals that have escaped
captivity, either escaping through poor fencing or being deliberately released.
Efforts to control the wild pig problem in Canada, at
present, are sparse, due to a perceived sense of security. We do not have African
Swine Fever (ASF), as in Europe, but we do have other swine diseases that could
just as easily move from farm-to-farm due to contact with these animals.
In terms of what could stem the tide, Brook suggests more
leadership is needed, along with aggressive but calculated culls. There are a
couple of reliable techniques available to do this, including use of what he
calls a “Judas pig” to lure hunters to an entire group of pigs, also known as a
“sounder.” Hunting the animals one by one has proven counter-productive, but
trapping and eliminating an entire sounder seems to work. The issue is keeping
pace with the growth of the problem, which is not yet happening.
“No one of these points alone will solve the wild pig
problem,” says Brook. “It will take a comprehensive plan.”
As for the cost?
“Not sure,” he answered. “Bloody expensive. Hundreds of thousands, maybe millions of dollars. One thing is sure: every year you wait, it gets more expensive.”
Nutrition research focuses on grow-finish and post-wean pigs
Breakout sessions on nutrition were hosted by Mike Tokach and Annie Lerner from Kansas State University, along with Francesc Molist from Schothorst Feed Research of the Netherlands.
Tokach and Lerner
delivered the presentation, “Feeding the Grow-Finish Pig and Managing Their
Increasing Carcass Weights.”
Their research suggests a historical trend toward market hog
weight continuing to increase by more than half a kilogram every year. Genetic
improvement allows these heavier weights to be achieved economically; however,
long-term increases in market weight require adjustments to production facilities,
nutrition programs, transportation and processing facilities.
The maintenance requirements of pigs are proportional to
their body weight. Thus, heavy-weight pigs have higher maintenance requirements
and must continue to eat increasing amounts of feed to dilute their maintenance
needs and provide adequate intake to maintain growth rates.
Heavy-weight pigs have increased capacity to adjust feed intake to different dietary energy densities to meet their energy requirements. Their increased gut capacity allows heavy pigs to digest and use energy from fibrous feedstuffs more efficiently through hindgut fermentation. Thus, producers may have the opportunity to lower feed cost by using fibrous feed ingredients. The potential negative effects of these ingredients on carcass dressing percentage must be considered in their economic evaluation.
Metabolic testing units used for studying pigs at Schothorst Feed Research, located in Lelystad, the Netherlands.
Molist delivered the presentation, “Feeding Programs and
Nutritional Strategies for Post-Weaning Piglets in the Absence of In-Feed
Antibiotics.”
In order to remove in-feed antibiotics in post-weaning
diets, it is essential to have a holistic approach and understand the roles of
nutrients like fibre, crude protein and fat in promoting intestinal health. The
nutritional strategy should be based on formulating low-nutrient post-weaning
diets to promote feed intake of the piglets while simultaneously avoiding
having an excess of non-digested substrate that can be used for the bacteria to
proliferate.
Use of fibre should be concentrated on accelerating the
development of the gastrointestinal tract. It is also important to formulate
low crude protein diets and use ingredients with high amino acid digestibility.
When formulating post-weaning diets, reduce the buffer capacity of the diet to
optimize stomach function.
Although, there is still a need for further research on the effect and function of fat and fatty acids in promoting intestinal health, it is advisable to use medium chain fatty acids and optimize the diet, taking into account the proportion of unsaturated to saturated fatty acids.
Sow management starts with gilts
Breakout sessions on sow management were hosted by Dan
Bussieres from Groupe Ceres of Quebec, along with Bob Thompson from PIC U.S.A. of
Kentucky.
Thompson delivered the presentation, “Factors Involved in
Sow Mortality.”
Sow mortality is a multi-factorial problem that increased as
our pork industry grew and expanded in the 20th century. A review of 3.6
million parity records between 1996 and 1998 has shown monthly mortality rates
were approximately 7.6 per cent in January 1996, reaching a high of 14.5 per
cent during the summer of 1998. With focus from researchers, veterinarians,
producers and breeding stock companies, it improved to where systems were below
10 per cent annualized with many in the four to six per cent range in the early
21st century. Then, as the industry started to expand again, mortality
increased until most systems were back to the low- to mid-teens.
Proper gilt development and acclimatization are essential to
build a sound herd. How you receive replacements will drive what efforts are
needed to be successful at retaining younger parities and reducing overall sow
mortality. Many producers in the U.S. have internal multiplication where herd
replacements are raised on-site. With increasing sow productivity and higher
replacement rates, it has stressed their systems to have enough good quality
select weight gilts. If there are any disease outbreaks, this creates an even
larger deficiency.
Reducing sow mortality is up to everyone involved in the pork industry. In Denmark, the industry has set goals to bring about country-wide efforts in this area, for the sake of accountability. If the same does not happen in North America, customer perceptions will eventually force us to act. Why not be proactive?
Groupe Ceres offers a full range of services in all fields of activity related to hog farming: management, nutrition and production of feed.
Bussieres delivered the presentation, “Key Aspects for
Capturing Reproductive and Sow Lifetime Performance.”
We often view the success of a sow farm by looking at the
number of pigs weaned per sow per year performance, which indeed is important
when we look at production efficiency. On the other hand, economically, this
number may not be the most important.
Gilts are the foundation of the herd, and a good start with
your gilts in their first cycle is key in order to optimize herd lifetime
performance. Gilts with higher litter size in their first parity will have a
higher retention rate. We should expect our gilts to have the best farrowing
rate of the herd and have 14 to 15 total born in their first litter. Also, we
should aim for a retention rate of 75 per cent or more up to third parity and
achieve between 55 to 60 pigs weaned per lifetime.
Optimizing sow and lifetime productivity starts with a good gilt program. Management and nutrition are key factors when looking at producing high quality replacement stock and making sure they have a good start in their first production cycle.
Pig resilience digs into DNA
Breakout sessions on pig resilience were hosted by John
Harding from the University of Saskatchewan, Jack Dekkers from Iowa State
University and Ben Willing from the University of Alberta.
Harding delivered the presentation, “The Natural Disease
Challenge Model for Evaluating Resilience.”
A natural disease challenge model was established at a
wean-to-finish research unit in Deschambault, Quebec in November 2015 to study
disease. The model has provided a unique opportunity to intensively monitor
disease transmission and expression.
The model has established that disease resilience traits like
mortality, morbidity and performance have a sizeable heritable component,
although the disease challenge is dynamic over time and not experimentally
controlled. This demonstrates that improvement of disease resilience using
genetic selection is possible, if appropriate measures of disease resilience
can be obtained on animals within the high-health nucleus breeding farms.
The model has provided a unique opportunity to intensively
monitor disease transmission and expression, and the effect of strategic
interventions in a commercial research facility that has been managed
consistently and systematically with well-trained staff over a four-year
period.
Moving forward, large-scale public-private collaborative
research partnerships will provide vital alternatives to improve pig health and
welfare on commercial farms. This natural disease challenge model will play a
role in that discovery.
Dekkers delivered the presentation, “Genetics and Early
Predictors of Resilience.”
Infectious disease represents one of the largest cost
components to the swine industry, incurring veterinary costs, loss of pigs due
to mortality, reduced performance and reduced animal welfare.
Unique and extensive data has been collected on a large
number of wean-finish pigs that can be used to understand the genetic basis of
disease resilience and to develop genetic tests or indicator traits to identify
pigs with high genetic merit for disease resilience, without having to expose
them to disease. The latter is essential for the implementation of selection
for disease resilience in nucleus breeding herds.
Genetic markers and genomic prediction provide a valuable tool to predict breeding values on animals for traits for which they are not being recorded. Disease resilience is a good candidate for this. Genomic prediction, however, requires ongoing recording of the phenotype in a so-called training population.
From left to right, presenters John Harding, Jack Dekkers, Ben Willing and Bob Kemp.
Willing delivered the presentation, “Host Microbial
Interactions and Disease Resilience in Pigs.”
Gut microbiota has been identified as one of the important
factors influencing disease resistance. Through a Genome Canada and Genome
Alberta funded project, Willing has endeavoured to identify microbial
populations associated with disease resistance and to characterize how
disruptions associate with altered immune development in pigs.
The gastrointestinal tract of newborn mammals is rapidly
colonized by environmental and maternal microbes with tremendous biomass and
diversity. The relationship, balance and mechanistic interactions between these
microbes in the gut is extremely complex and not well understood in states of
health or disease.
Antibiotics may cause transient or persistent alterations in
gut-associated microbiota and are suggested to be a major contributor to
increased prevalence of immune mediated disorders. Since the gut microbiota –
which consists of a dynamic community of bacteria, viruses, fungi and archaea –
is known to impact the development, maturation and function of the immune
system, it is a natural extension that the microbiota will impact vaccine
efficacy.
In humans, increased sanitation, reduced exposure to microbes in early life and frequent use of antimicrobials have been associated with an increased susceptibility to certain disease conditions. This can also be the case with swine production where different production methodologies and technologies are employed.
Smart technology’s integration challenges
Breakout sessions on smart technology were hosted by Dale
Polson from Boehringer-Ingelheim Animal Health of Georgia, Chris Bomgaars from
EveryPig Inc. of Florida and Benny Mote from the University of Nebraska.
Polson delivered the presentation, “Precision Livestock
Ecosystems: Integrating Technology, Process and Culture.”
Each precision livestock farming technology generally has
value potential for any given farm site and thus can be evaluated to a degree
in a similar manner as other products and services have always been and
continue to be today. However, the greatest value of individual precision
livestock technologies is not realized in isolation.
There are three primary elements to a strategic framework
for all ecosystems that integrate and connect cyber-physical systems within any
business environment: technology, process and culture. For all businesses and
commercial operations that operate within each business environment, people are
the drivers, technologies are the vehicles and processes are the roadways.
The potential of precision livestock farming technologies is clear. To continue to chase that potential and beyond, many existing as well as new start-up companies will enter the marketplace to supply these technologies to livestock producers. The challenge for these companies will be offering a clear value proposition for producers, related to effective integration and cost-consciousness.
An example of the EveryPig interface, as shown on a tablet screen.
Bomgaars delivered the presentation, “Reducing the Threat of
African Swine Fever (and Other Severe Diseases) Through Telemedicine.”
Infectious disease outbreaks originating overseas have often
been treated as someone else’s problem, unlikely to affect pork production in
North America. As we have seen in recent years, the wait-and-see approach to
the spread of disease among livestock may be an increasingly risky one.
The last 30 years have seen a shift to larger but fewer
production operations. With this shift, efficiencies as well as the quality of
the product have improved. Data collection and storage, however, still lag
other industries.
The early detection of ASF is uncommon using the current
methods available on-farm. As such, differential diagnoses are troublingly
common. Barring the widespread adoption of portable laboratories, we can assume
that early detection will continue to fall on the shoulders of on-site
caregivers should the disease arrive in North America.
With the threat of ASF looming over the pork industry, it is
more important than ever that producers adopt a structured data approach. The
ability to spot the symptoms of ASF and other infectious diseases quickly may
be the difference between containment and bankruptcy. Services like EveryPig
provide structured barn-level data collection made exclusively for the pork
production industry.
Mote delivered the presentation, “Individual Pig Activity
Tracking in Group Housed Swine Offers a Deeper Understanding of Swine
Production.”
Advanced detection and intervention of compromised pigs
significantly increases the probability for recovery in addition to the
potential for reducing disease transmission spread or subsequent injuries. To
date, identifying sick or injured pigs is achieved through visual evaluation by
caretakers and has practical limits as to the amount of time they can allot to
monitoring each individual pig.
Application of precision technology has been slower to
develop in the livestock sector than the crop sector due to the complexity of
tracking individual animals. However, advances in technology has progressed to
the point that the industry is on the cusp of a technology revolution.
As a means to address this need, Mote’s team developed and
evaluated a deep feature-based detection and tracking platform, known as
NUtrack Livestock Monitoring System, with the capabilities to automatically
identify, maintain individual identification and continuously track the
activities and location of group housed pigs. The system is built around
consumer-level security camera hardware and desktop computers with graphics
processing units.
During a 42-day trial, the overall accuracy of the system
was shown to be greater than 99 per cent when pigs were not lying down. The
unrivaled ability and accuracy of the NUtrack system contributes enormous
promise in the advancement of precision livestock farming for swine.
Pork Commentary, March 23rd, 2020 Jim Long, President-CEO, Genesus Inc.
Last week U.S. 53-54% lean hogs increased from 58.47 to 61.78 – $6.00 plus a head.
Last week USDA pork cut-outs went from 69₵ to 80₵ lb. – $22.00 plus a head
Latest U.S. weekly Pork Exports were 43,000 tonnes, down 4% from previous week’s record number (China 15,580 MT).
U.S. Pork Exports continue to run almost double a year ago.
Summary
Cash Hogs up
U.S.D.A. pork cut-outs up
U.S. Pork Exports circling record levels
Pork Demand holding in face of Coronavirus challenge
Coronavirus (COVID-19) effect on Hog Markets
We picked some of the countries hit by Coronavirus and used the date of late January as the beginning of outbreaks.
South Korea
January 22, 2020
2,393.00 Krw/kg.
March 18, 2020
3,867.00 Krw/kg.
China
January 22, 2020
36.615 Rmb/kg.
March 4, 2020
36.66 Rmb/kg
Spain
January 23, 2020
1.42 Euro/kg.
March 19, 2020
1.51 Euro/kg.
Italy
January 23, 2020
1.65 Euro/kg
March 19, 2020
1.50 Euro/kg.
Many of these countries already had high prices. Main point, it appears that demand has held as have already high prices.
Domestic demand for Pork has jumped
Retail stores have been in many instances stripped of meat due to a combination of restaurant closures, hoarding, and more home meals.
Saturday U.S. kill was 313,000 head, up from 184,000 a week ago, reflecting huge packer margin and demand for pork.
Certainly, no sign Pork demand is slowing due to Coronavirus
Lean Hog Futures continue their gyrations
Getting more and more disconnected from the fundamentals of the market.
More and more we see Lean Hog Futures as a pox on our house.
Every other swine market in the world functions without one.
Most if not all hog markets don’t have to deal with instability that it creates.
Most if not all other global hog markets are more profitable for producers than the one with a lean hog future.
Jan-Feb 2019 China Publicly Traded Companies hog sales versus Jan-Feb 2020
China has several publicly traded companies that report their hog sales. Below is a comparison between Jan-Feb 2019 and Jan-Feb 2020.
Company
Sales Jan-Feb 2020
% change from 2019
Wens
1.4 million head
– 65%
Muyuan
1.395 million head
– 31%
Zhengbang
.642 million head
– 43%
New Hope
.553 million head
+18%
Tiabang
.288 million head
– 44%
DBN
.151 million head
– 54%
Aonong
.115 million head
+12%
Tiakang
.088 million head
– 35%
Tangren Shen
.066 million head
– 64%
Certainly, fewer hogs marketed in general this Jan-Feb. We expect due to ASF and Coronavirus logistic issues.
Last year on the first of February China’s price for market hogs was 12.23 rmb/kg. (82.61₵ U.S. Liveweight a lb.).
This year Feb. first, China’s price for market hogs was 36.43 rmb/kg ($2.38 U.S. liveweight a lb.)
China is certainly short of pork.
Summary
It appears unlike many commodities and products, the Coronavirus issue has not depressed hog prices if anything they have gotten stronger.
Toilet paper demand, Lysol demand, and Pork demand are some of the few things that can say demand is better in the Coronavirus crisis.
Genesus Customer Testimonials
Mayfield AB, Canada
“Genesus works well for our bam. We need animals that are hardy, strong survivors. The sows produce lots of good quality pigs that are uniform.
The pigs grow well throughout the bam. We get lots more pigs to market than when we were with one of the competitors’ lines. The boars are good workers, produce fast growing pigs with good grades.”
Dabaco Group, Vietnam
“Duroc Genesus has great structure and impressive well-tolerance to Vietnam’s hot and humid weather conditions. The growth rate is impressive with an average of 1,000 gr/day (30kg to 110kg) with a low FCR. Great meat quality – dark red color and tender with high marbling score..”
Disease-related emergencies are familiar to many in
attendance at the Banff Pork Seminar. At least three separate presentations
were focused on the threat posed by foreign animal diseases, and just last
year, on the first day of the seminar, Alberta announced it had recorded its
first-ever case of porcine epidemic diarrhea (PED).
Seminar presentation topics under the banner of disease
preparedness were delivered by Amy Cronin of Swine Health Ontario, Egan
Brockhoff of Prairie Swine Health Services and Alex DeJong of BMO.
In addition to presentations during the seminar, producers from across the country, and some guests from abroad, were invited to take part in a pre-seminar Serious Animal Disease Emergencies workshop through the Animal Health Emergency Management (AHEM) Project. The session was hosted by Alberta Pork and the Canadian Pork Council (CPC).
AHEM workshop prepares producers
Todd Bergen-Henengouwen is the resource development lead for the AHEM project. He also operates a mixed crop farm in southern Alberta.
“We were pleased with the turnout, given that not all guests
had arrived in Banff that early, and given that not everyone in attendance at
the seminar is a producer,” said Matt Taylor, Project Manager, AHEM. “We felt
the seminar was a good opportunity to efficiently attract participants at a
time when they were already travelling and prepared to expand their knowledge.”
The goal of the session was to introduce producers to
disease prevention strategies that they could take back to their own
operations. Producers were also versed in disease response management, to
prepare for the unfortunate case that disease should enter their own herds. The
event featured an introduction to a new producer handbook, an emergency
scenario simulation and networking opportunities.
“For us, the development of this handbook was an important
step for our producers,” said Javier Bahamon, Quality Assurance and Production
Manager, Alberta Pork. “Resources are great, but they require instruction.
Through the AHEM project, producers are able to receive a helpful resource for
reference, along with the appropriate training to integrate these strategies
into their existing emergency plans.”
The handbook is divided into five sections, which include
information on understanding risks to the industry, preparing for disease,
responding in the event of an outbreak, and sections for definitions and
additional exercises for producers to complete.
So far, handbooks have been customized for pork producers in
Alberta, Manitoba and Nova Scotia. Similarly, handbooks have been customized
for beef, dairy, goat and sheep producers across the country.
In 2018, the initial AHEM project team released 13 plans and associated handbooks. In 2019, during the project’s second phase,
the development of another 15 plans and handbooks began. The plans provide
step-by-step guidance on roles and responsibilities for staff at provincial and
national associations, and the handbooks offer clear and concise information
for producers.
To promote these resources, the AHEM project kicked off a series of scheduled pork-specific workshops, including a November 2019 session in Red Deer, Alberta and the January 2020 session in Banff, followed by a March 2020 session in Red Deer. Further workshops for pork and other sectors are being planned across Canada.
African Swine Fever is top priority for the Canadian Pork Council
African Swine Fever (ASF) preparedness is a primary concern for the Canadian Pork Council (CPC). Céline Bourbonnais, Communications Manager, CPC provided an update on the organization’s national communications plan in the event of an outbreak, during a CPC board meeting in Banff.
Egan Brockhoff is a veterinarian and partner in Prairie
Swine Health Services of Red Deer, Alberta, in addition to serving as a
veterinary counselor to the Canadian Pork Council (CPC). Brockhoff’s work takes
him to farms across western Canada and even to Asia, where he has witnessed
first-hand the devastation caused by African Swine Fever (ASF). He delivered a
presentation as part of a breakout session at the 2020 Banff Pork Seminar.
For its part, the CPC is preparing to combat ASF by hosting
bi-monthly meetings with Canadian Food Inspection Agency (CFIA) officials to
raise awareness and understand what the agency is doing. CPC is also meeting
with the Animal Nutrition Association of Canada (ANAC) to explore ways to
address the potential risk of imported feed and feed ingredients being
contaminated with ASF.
Collaboration is key. CPC regularly communicates with the U.S. National Pork Producers Council and partners in Mexico to share information and work on a unified North American response plan. Through the Canada West Swine Health Intelligence Network (CWSHIN) and other regional partners, information is being shared with veterinarians and producers across the country.
Inching closer to an ASF vaccine
At the same time the Banff Pork Seminar was taking place,
the Canadian Food Inspection Agency (CFIA) announced that the University of
Saskatchewan’s Vaccine and Infectious Disease Organization-International
Vaccine Centre (VIDO-InterVac) will embark on new ASF research to further
support Canada’s preparedness strategy. This complements ongoing collaborations
between the CFIA and VIDO-InterVac aimed at developing and testing vaccines and
antivirals for ASF.
“CFIA’s support increases Canada’s international
contribution to combat the spread of ASF,” said Volker Gerdts, Director,
VIDO-InterVac. “This is a prime example of how this CL3-Ag infrastructure
supports national priorities against emerging infectious disease and the
development of solutions that mitigate their impact.”
Gerdts was a presenter during one of the seminar’s breakout
sessions, during which he provided an overview of VIDO-InterVac’s work and
explored the different kinds of viruses and corresponding vaccines from an
epidemiological point-of-view.
Several experimental vaccines for ASF have been based on
gene-deletion mutants. However, the concern with these vaccines is that, at high
doses, they can cause disease by themselves. Because these vaccines use live
viruses, vaccinated animals will shed the virus into the environment, which
could infect other animals in a pig herd or potentially spread outside a farm
and infect wild pigs, which carries a much greater risk for transmission.
In contrast, inactivated vaccines are very safe, as all
pathogens have been completely inactivated. However, an inactivated vaccine
virus is no longer able to enter the cell, thus appearing to the immune system
as an extracellular pathogen, which leads to a suboptimal immune response. In
the case of either gene-deletion vaccines or inactivated vaccines, there is no clear
answer to the ASF problem.
When vaccines are not available for disease response, the economic impact of that disease is compounded, as we have seen with ASF and PED. Vaccines play a critical role in protecting our industry, but at the same time, practical considerations need to be made for the changing expectations of producers and herd veterinarians. It is essential that novel platform technologies are created to allow for rapid, cost-effective vaccine development, while preserving global trade partnerships and keeping our industry competitive.
Ontario Swine Incident Command Centre stands ready
Amy Cronin explains the biosecurity protocols on her own farm.
Amy Cronin is a Guelph-area hog farmer, mother of six,
school board trustee and former board director with Ontario Pork who is part of
Swine Health Ontario’s (SHO) Ontario Swine Incident Command Centre. For the
past four years, she has also served on the Banff Pork Seminar Advisory
Committee.
SHO is a leadership team comprised of representatives from
Ontario Pork, the Ontario Pork Industry Council (OPIC), along with ex-officio
representation from the Ontario Ministry of Agriculture, Food and Rural Affairs
(OMAFRA).
SHO was formed to facilitate a collaborative approach to improving and better coordinating the pork industry’s efforts to prevent, prepare for and respond to serious swine health threats in Ontario. SHO subsequently identified the development of an Ontario Swine Incident Command Centre (OSICC) structure for industry disease response, following the principles of Incident Management Systems (IMS), as a key strategic goal.
Protecting your bottom line in a disease outbreak
Alex DeJong is a Senior Director of Agriculture and
Agri-Business at BMO, based in Ontario. He presented on financial planning in
the face of foreign animal disease.
Alex handles large and strategic agricultural client
relationships across the province, including large cash crop, protein and
horticulture producers, as well as grain elevators and input suppliers. He and
his team work closely with clients to provide advice, direction and flexible
credit structures to meet their specific needs and business goals.
Financial considerations in a disease outbreak are specific
to individuals, but in general, the main issue is are likely to be related to
cash flow and marketability of hogs. One-month, three-month and six-month plans
are recommended to help producers manage in the event that borders close to
exports or there are other disruptions to pig movements.
Partnering with your lender is crucial to arriving at a plan
that works. It is important to know how you and your lender can work together
to support your business during a potential disease outbreak. Financing
solutions and other strategies differ between institutions, which is why
producers should not hesitate to make appropriate arrangements to protect
themselves.
Packing Capacity Coming Back
Pork Commentary, May 11th, 2020
Jim Long, President-CEO, Genesus Inc.
Last week U.S. Pork Packers started to recover some production capacity lost to Coronavirus plant issues.
U.S. 2-day Harvest – Friday (May 8th) and Saturday (May 9th):
For the week (ending May 9th):
A gain of 150,000 head Friday-Saturday compared to the same 2 days week before. With Tyson – Waterloo and Logansport, Smithfield – Sioux Falls, JBS- Worthington, plus others coming back online there is hope the daily harvest numbers will continue to increase.
Other Observations
There is no doubt hogs have been backed up.
Probably a couple million hogs at least. Hog slaughter weights going up now in the 221 lb. carcass range. The week of April 10th they were 212.54 lb. A gain of almost 9 lbs., almost 12 lb liveweight up. That is at minimum a week’s worth of hogs backed up (2.5 million?).
U.S. Pork cut-outs
About three weeks ago U.S. Pork cut-outs were 50₵/lb. Some Pork Bellies were at that time, being sold at 30₵/lb. Last Friday skin on 10-12/lb. bellies were $2.96/lb.
Pork Cut-outs closed last Friday at $1.16 – up from 50₵ three weeks ago. That is an increase of $146 per head. Goes to show what happens when supply decreases in a market that has solid demand.
If we use the current National Daily Base lean price 53-54% hogs price of 63.32₵/lb. and subtract that from U.S. pork cut-out of $1.16 we come up with a difference of 53.22₵/lb., times a 220 lb. carcass, we have Gross Packer Margin of $117 per head. As far as we know the biggest spread in history. Certainly, a huge incentive for every Packer everywhere to get hogs slaughtered. An idle plant will be losing money and missing out on huge, huge profit margins.
Farmer arithmetic: a plant with 10,000 head capacity, sitting idle is short at least $1.2 million a day in today’s market.
No doubt there is sow herd liquidation
Latest weekly sow slaughter numbers were 68,409 heads, last year average 57,500. The sow price has collapsed, most in the 15₵/lb. range. Sow packer Margins are probably at record levels. The adage “You only pay what you have too” comes to mind.
We expect U.S. sow herd decreasing at 15-20,000 sow a week range. The combination of sow herd liquidation, less gilt retention, planned abortions, litter size management, and euthanization is certainly cutting the number of hogs coming this fall and into next year. We estimate fall hog numbers could be up to 150,000 less a week than were expected the first of March.
Plant capacity
We have read in several places that there are estimates the U.S. hog plant capacity could be cut by 80% due to Coronavirus operational rules. We question this. We believe some plants are running over 80% now. How are Saturdays factored in this? There is no arbitrary 80% rule, it is just speculation. Time will tell.
We expect American ingenuity driven by opportunity will be yet a huge factor.
Running out of meat is not expected in America
Demand is there, however, the supply of pork, beef, and chicken have all been cut by plant issues. President Trump seems to get it. He invoked the National Defense Act to get plants up and running.
Last week at a meeting President Trump was having with Iowa Governor, Kim Reynolds, U.S. Secretary of Agriculture, Sonny Perdue, was asked for a timeline regarding plants reopening. His reply “probably a week to 10 days where it is fully back up.”
American society is used to getting what they want when they want it. Running out of meat is not expected in America! Let us hope plants get rolling and to capacity.
The financial impact of the current situation for many producers is terrible. This is a resilient industry. Some positives include continued strong exports and obvious domestic pork demand.
Get plants close to capacity, many of the current issues in the market go away.
Genesus Customer Testimonials
Green Acres AB, Canada
“Purebred gilts coming into the herd adapt very well. We are seeing our numbers creep up due to the Genesus F1. We are happy with the service we get from Genesus.”
Brantwood Colony, MB, Canada
“We are still happy with Genesus pig performance. Always getting better. Going on 30 years all Genesus.”