Pork Commentary, March 16th, 2020 Jim Long, President-CEO, Genesus Inc.
We have to scour for anything to write up about other than the Coronavirus. Not much we know, unlike TV news anchors who have become virus experts in the last few days. So this week we are going to make some random observations- maybe relevant or maybe not.
• The U.S.D.A 53-54% average lean hog price increased from 56.44 to 58.47 in a week. – A year ago 53-54% was 53.97 – Almost $10 a head higher than a year ago • On Friday U.S.D.A pork cut-outs reached 70.04₵ a lb. – First time in several weeks over 70₵ a lb. – Increased price means better demand. • U.S. Pork Exports set another weekly high at 44,500 metric tonnes, led by China at 16,120 metric tonnes • European Hog Prices remain high. – Spain at 1.54 Euro/Kg., is at record levels (78₵ a lb.) – China’s average price is 36.66 rmb/Kg. ($2.38 lb.)
Our Farmer logic
U.S. lean hog prices rising, U.S.D.A. cut-outs increasing, U.S. pork exports at record level and European Pork is more expensive, while hog prices in China are at levels beyond normal comprehension.
Sounds like a recipe to bake a happy cake?
Not so Fast…
We have lean hog futures.
• They have collapsed despite many positive market directions.
• Lean Hog Futures based in Chicago – (Las Vegas with no rules) seems to create instant negativity in our industry.
• No other hog producing country in the world has lean hog futures except the U.S.A.
• 92% of the world hog industry seems to have managed to operate without lean hog futures.
• From what we can see every other country has higher hog prices than the U.S.A (Canada)
Quite the system, Canada is the wagging dogs’ tail of the U.S. futures and pricing system.
Last time we wrote about our observations of the effect Lean hog futures we got more response comments than any time over the past twenty years of writing. All supportive of the observations except one.
We know that nothing will change- lean hog futures will continue as long as money flows into them and there is a whole industry of brokers and agents collecting commissions on the activity with an obvious vested interest to perpetuate the current system.
To Summarise:
• U.S. Hog price rising
• U.S. Pork Cut-ours rising
• U.S. Pork Exports – record level- including China
• European Hog prices – near or at record levels
Genesus Customer Testimonials
Rosedale Colony, AB, Canada
“What can we say … we are using the best genetics alongside with great service from Genesus.
Together, this helps us achieve the results we get. We have exceeded our expectations.”
El Tigre Farms, MB, Canada
“Our farrow to wean operation has been using Genesus sire line since 2016. The customer service Genesus offers is second to none and they are willing to go that extra mile to ensure that our needs are met.”
This may seem a really stupid question. Of
course in live pig production we are managing pigs! But are we?
We are in business to make a profit and
to make this profit as big as we can. Profit requires income, which means
sales. Pig production is a really simple business. We sell only one thing which
is kilograms.
To maximise income, we need to maximise kg
sold and or value of kg sold; ideally both. So, what are the limiting
factors for sales of kilograms?. This is where we normally start thinking pigs
weaned/sow/year, mortality, growth rate, etc. as the really important factors.
Yes, they are all factors, but not the first limiting factors.
Just like every business in the world, the
first limiting factor is time. 60 seconds in a minute, 60 minutes in an hour,
24 hours in a day, 7 days in a week and 365 days in a year! There is nothing we
can do to change this!
Just like many other business’s we have space
as a limiting factor. This is the space we have to grow pigs in our Nursery and
Finisher pens. How like other industries? Aviation, space (number of seats and
planes) and time, restaurants, space (number of seats) and time. Retail, space
(m2 of shelf and floor space) and time.
So, we are managing space and time. The
measurement of this space and time is kg sold /m2 of space in
nursery and finisher/year. The pigs are what passes through our farms in time.
My estimation is that today’s maximum kilograms sold / m2 is in
the 580 kg to 590 kg per year. We have a Russian customer currently producing
545 kg per year. Understanding this is basic to understanding how we
manage our farms and what our priorities are. Very simply:
Filling all the available space in nursery and finisher with growing pigs.
Fastest growth / m2.
Minimise the time that the space is empty for sales and washing.
Once this is understood, we now know the
function of the sow herd. Again, this is simple:
Produce enough weaned piglets so finisher is 100% full when room is sold.
Produce weaned piglets with the highest potential for growth (Genetics and health).
This is a simple mathematical calculation.
Once you know the target to wean, take weaned per so farrowed and this will
give you total number of sows to farrow (this may vary with seasons so may be a
moving target). Using farrowing rate you can calculate how many to breed. This
will also be seasonal and need to be varied.
Lowest Cost Or Highest Profit?
Another stupid question? Of-course lowest
cost will mean highest profit, we all know that. Once again, does it?
Here again, we need to first look at other
industries and even to a degree our own. Is the car that is the cheapest to
produce the most profitable to sell? Do the restaurants with the lowest costs
make the most profit. Do the lowest cost cuts of pork make the most profit /m2
of supermarket shelf?
Of-course when it comes to non-production
costs like bank interest, depreciation, waste disposal, administration, and
management then these should always be minimised. Non-production costs are ones
that have zero effect on kg sold.
Direct production costs we need to look at
cost vs return. What is the cost of this product or cost to do a task, vs the
number of kilograms it will produce! If the cost is more than the value of the
kilograms produced then do not do or buy!
A big example is feed. Many people obsess
over FCR as the “be all and end all” number that matters. FCR as a stand-alone
number for comparison of farms really means very little! It is affected by many
things, raw materials, chosen energy level, genetics, slaughter weight, feeder
design, wet or dry feeding, pellet or mash feeding, health, vaccinations to
name but a few!
The really important number when it comes to
feed is “Margin Over Feed”. This is directly linked to profit as in reality it
is only feed that is a variable cost (what do you save if you reduce slaughter
weight by one kilogram).
With feed you really do need to decide lowest cost or maximum profit, according to Genesus latest research at Rock Lake. Feeding lower energy (cheaper) finisher diets will give you the lowest cost of gain.
However, feeding higher energy (more expensive) diets gives you highest margin over feed
This is because of the effect of higher energy diets on growth rate and lower FCR.
More kilograms = higher income!
Think maximum profit – maximise kg/m2 and look at the effect of ‘cheapest’ diets.
Genesus Research and Development
The Genesus research and development program
is focused on continual improvement of our products and services. Our use of innovative
technologies and time-tested methods ensures that our products and services
provide our customers a competitive edge.
Genesus invites you behind the scenes to find
out more about our programs and to show that we mean it when we ask you…
Tina Varughese uses her own background and a humorous approach to tackling issues related to cross-cultural communication. She is a long-time colleague of Marvin Salomons.
Changes continue to take place in the Canadian pork
industry. Each year brings new threats in disease and market challenges. Even
so, the industry continues to be spurred on towards opportunities fueled by
primary and processing innovations that enable pork to be sought as a food of
choice.
Another face of industry continues to change as well. As we
delve into the barn, we see a changing culture in the people managing and caring
for pigs. Not only a changing mindset but also a change in the very culture of
the people themselves. Today’s Canadian pork operation is a vibrant mix of new
cultures from all corners of the world. This same trend can be seen in the
industries that support these farms. People with different experiences,
languages and beliefs working side-by-side to produce Canadian pork for the
world. The people and languages inside a barn bring a whole new dimension to
working effectively in a team environment.
Visit a Canadian pork farm today and you will not be
surprised to be greeted by a worker from a country other than Canada. All came
by choice and desire to work in our industry. These new people bring new characteristics
and are being readily embraced by the industry as a major part of a new
workforce strategy and need that keeps Canada’s pork industry in the game.
Having an effective team means understanding those team members, including their cultural backgrounds. That is the message Tina Varughese brought to the 2020 Banff Pork Seminar, delivering keynotes in a breakout session called, “50 shades of beige: communicating with the cross-cultural advantage.” Rated as one of Canada’s top speakers, Varughese knows the drill. Being an Indo-Canadian daughter of first-generation East Indian parents, she draws on personal experiences in delivering her humorous, high-energy talk on diversity and inclusion in the intercultural workplace. Fifteen years of working in Alberta’s Immigration Office, in addition to operating her own settlement and relocation business in Calgary, give her a true understanding of many different cultures.
Why talk about cross-cultural communication?
Tina Varughese says top successful organizations understand that being able to communicate cross-culturally in the workplace results in better productivity, performance and employee engagement. This is no different on the farms and businesses in Canada’s pork sector. She says managing diversity drives profitability, leads to innovation and promotes an inspiring workplace culture. Within Canada’s population, Varughese points out 20 per cent are foreign-born, with the top source immigrant countries to Canada being India, China, Pakistan and the Philippines. For the Canadian pork industry, currently, the top source countries of foreign workers are Mexico, the Philippines, the Netherlands, U.K., Ireland and Ukraine. From the industry’s perspective, there is a desire to turn these “temporary, foreign” workers into permanent Canadian residents or citizens.
Where workers originate
No specific data breaks down country of origin for workers in the Canadian pork sector, but anecdotal sources indicate the top targeted source countries are those shown here.
A view of work permits issued over the past few years by Canadian authorities show many countries provide the wide array of new cultures coming to Canada. Unfortunately, Immigration, Refugees & Citizenship Canada (IRCC) does not break down the permit numbers by sector, but historically, the most significant portion of foreign worker permits are issued to the agriculture and food processing sectors. Of those, the majority are coming under the Seasonal Agricultural Worker Program (SAWP) from targeted Caribbean countries and Mexico for seasonal businesses like beekeeping, fruits, vegetables, tree nurseries and other harvesting operations. While IRCC data covers all Canadian business sectors, the countries of origin represented in the pork sector do represent a significant portion of the foreign worker permits issued in agriculture each year.
Individualists versus collectivists
From one country to another, our appearances may differ, but
so do our values and approaches to interpersonal interactions. Varughese’s
message builds on this using the work of renowned Dutch social psychologist
Geert Hofstede, well-known for his pioneering research on cross-cultural groups
and organizations. The concept centres around findings that show, depending on
the society in which a person is raised, he or she will either lean towards
individualism or collectivism.
Varughese says individualist values reflect individual tastes, goals, achievements and accomplishments, whereas collectivist values reflect shared ideas among families, work divisions and communities. Every decision, conversation and contribution we see in the workplace is reflected by these constructs. According to Hofstede, it has to do with whether a person’s self-image is defined in terms of “I” or “we.” In individualist societies, people tend to look after themselves and their direct family only. In collectivist societies, people belong to “in-groups” that take care of them in exchange for loyalty.
Considering the cultural compass of pork farm workers
Dutch social psychologist Geert Hofstede developed a compass that identifies levels of individualism or collectivism for every country in the world.
If managed well, diverse teams work. Knowing the team’s
individual make-up and values is key.
Hofstede developed his “culture compass” around six values – one of which is the degree of
individualism inherent to a society and how this is reflected by those who
belong to that culture.
Hofstede’s compass scores each country on various traits.
The top collectivist countries in the world are Guatemala, Ecuador, Panama,
Venezuela, Columbia and Indonesia, while the top individualist countries are
the U.S., Australia, U.K., the Netherlands, Hungary and Canada.
In looking at several of the main countries used to source
foreign workers for the pork industry, we can see huge differences in country
scores based on Hofstede’s compass. Comparing several selected countries like
Mexico, Ukraine and Ireland with Canada demonstrates why it is important for
employers to consider this information when dealing with foreign employees.
Mexico, with a score of 30, is considered a collectivist
society. For Mexican workers, loyalty is paramount and overrides most other
societal expectations. Mexican society favours strong relationships where
everyone takes responsibility for fellow members of their group. In
collectivist societies, an offence made to someone often leads to shame and
loss of face. In addition, employer-employee relationships are perceived in
moral terms, much like a family link. While Canadians may not instinctively
think along these lines, employers hiring and promoting workers from
collectivist cultures should take into account how these decisions could affect
an employee’s in-group.
Ukrainians are also found to be very collectivist. If
Ukrainians plan to go out with their friends, they might say, “We with friends,”
instead of, “My friends and I.” Family,
friends and even entire neighborhoods are foundational to Ukrainians’ approach to
everyday life. Relationships are crucial for obtaining information, social
networking or for successful negotiations. They need to be personal, authentic
and trustful before one can focus on tasks and build on a communication style.
Canada and the U.S. score 80 and 91, respectively, on the dimension of individualism. These figures are the highest for this given dimension, characterizing us as having as very individualist cultures. In the business and working world, this translates into an employee expectation of self-reliance and initiative. Within the exchange-based world of work, hiring and promotion decisions are based on merit or evidence of what one has done or can do. As a result, a Canadian individualist working alongside a strong collectivist will approach communication and the job quite differently.
Communicating using different styles
Effectively communication with employees means understanding what works for them.
In her presentation, Varughese pointed out there are several
communication styles that are factors in how people talk and deal with each
other. She elaborated on the following categories:
Reflexive: Reflexive communicators will often repeat parts of the conversation using the same tone and intonation in the conversation. Reflexive speakers feel repeating the conversation shows respect and understanding.
Interruptive: Interruptive communicators often interrupt the conversation without knowing it. Given their family and community-oriented culture, collectivists are often by nature interruptive.
Direct: Direct communicators use fewer words and less non-verbal communication. This practice may be perceived as rude, abrasive or arrogant, but in reality, it may be indicative of culture. Like many North Americans, Ukrainians are very direct communicators and may not need as much positive reinforcement as others.
Indirect: Indirect communicators are often collectivists who view group or team harmony as being more important than disagreeing with someone. Mexicans who fall within this group are less direct in communication. Filipinos are strong collectivists, very hierarchal and indirect communicators. For them, saving face is important, so careful, non-embarrassing feedback is key.
The methods by which employers communicate with employees
can have a significant impact on job performance. Varughese says there is a
close link between performance feedback and indirect versus direct
communicators. In North American cultures, she says the “sandwich approach” is
used to offer performance feedback. The process involves delivering positive
news first, followed by constructive criticism and ending with positive
feedback. However, not all cultures resonate with this technique, but employees
from all cultures still need meaningful feedback. Offering specific positive
feedback will reinforce desirable behaviour. An employer could try saying
something like, “You did a great job processing that last batch of pigs. It was
done right, fast and met our SOPs.”
Varughese says direct communicators do not always give positive feedback, as it is not part of their culture, and doing good work is viewed as an expectation. She says this can be deflating for some and lead to employee disengagement on the job. She notes indirect communicators still need positive feedback, but if they are collectivists, the praise would be better offered in-person rather than in a group setting like the staff room at coffee break. In this case, indirect communicators will not respond well if the entire team is present. The feedback is better delivered behind closed doors so that the indirect communicator, who may also be a collectivist, recognizes that their job is not threatened. Hierarchy is important in some cultures and can play a role in the process.
Communicating using different platforms
In today’s workplace, communication is typically done in one
of three ways: face-to-face, by phone or by email. In the pig barn,
communication within and between teams or management can be difficult
especially where technology is not readily accessible or where differences in
culture, language or understanding of expectations are unclear. In collectivist
cultures, like Mexico and the Philippines, chit-chat is about relationship-building
and may include discussion about family, community, school, politics and
sports. On the other end of the spectrum, in Canada, chit-chat can be
superficial and addresses the current weather or asking how someone is feeling,
often without much emphasis on finding out the true answer.
Language skills are important in relaying your message,
especially when it comes to doing important tasks on the farm, such as breeding
sows, recording data and identifying health concerns. Varughese says, if
English is a second language, a phone call should be followed up with an email,
to ensure the message is understood and that nothing has been lost in
translation. Another technique is the use of photos as a communication aid, if
the matter is visual in nature, such as animal health symptoms. Using this
technique can also spare workers from embarrassment or misunderstanding if
accented speech is an issue.
Varughese also notes where mixed cultures and languages exist in a working team, speaking only English or French on the job should be encouraged. This alleviates issues where people feel they are being excluded from the conversation or being talked about. In some cultures, this can be viewed as rude. Leave the talking in mother tongues for coffee and lunch breaks.
Exercise caution with non-verbal communication
According to Varughese, non-verbal communication such as gestures,
posture, eye contact, smell, silence and personal space can be interpreted
differently in each culture. Gestures such as physical greetings – like handshakes, hugs and kisses – vary from culture to culture, and
simple signs such as giving the “thumbs-up” or the “all-OK” sign can mean different
things and might be considered offensive in some cases.
In North American culture, direct eye contact is expected and respected, while in some cultures, it can be viewed as disrespectful. Vocal tone and volume can also be perceived differently. Some cultures expect leaders to have loud voices; on the other hand, in Japanese culture, a loud voice signals someone is out of control. In North America, silence is often viewed as a lack of interest, whereas in some cultures, it is seen as someone who is reflecting on what is being said.
Opening your mind will help your operation
An impromptu Bollywood-style dance routine caught attendees off-guard but served to illustrate a point.
Navigating the ins and outs of cross-cultural communication
may be daunting, but it could also be an important consideration for your
business. Rather than arriving at wrong conclusions about your workers, try to
understand their backgrounds and how this affects communication.
To wrap up her presentation, Varughese asked attendees to
rise from their seats and participate in a fun dance routine based on the
Bollywood-style of Indian movies. The exercise was done to demonstrate a
principle: when in doubt, mirror the image, the gesture or even the tone when
dealing and communicating with employees whose cultural backgrounds are
different from yours. Failing to do so could result in lost production or
profit.
Pork Commentary, March 9th, 2020 Jim Long, President-CEO, Genesus Inc.
Spain last week reached a record high in hog prices at 1.54 euro a kilogram liveweight (79₵ U.S. lb. liveweight). Its ability to push exports to China is really paying off.
Spain’s pork production in 2019 was 4,627,179 tonnes up 2.13% from 2018.
In 2019, Spain was the leading E.U. exporter of pork and pork products, with a total of 1,183,750+ (869,540+ in 2018), and doubled its exports to China (668,780+ vs 315,140+)
In 2019, the whole of the European Union exported 4,735,210 tonnes of pork and pork products. An increase of 20% (800,000-tonne increase). Of this China took 2,419,490 tonnes, almost double 2018. When we look at China-E.U. imports, it’s about 46,000 tonnes a week in 2019.
The January 2020 U.S. exports to China-Hong Kong, indicates 97,002 metric tonnes. A year ago 26,744 (+361%). Obviously, U.S. exports going in the right direction. Our farmer arithmetic tells us that China-Hong Kong exports in January equal about 1 million market hogs.
January’s total U.S. exports were 273,603 metric tonnes, up from last year’s 201,835 metric tonnes. The difference of 72,000 tonnes is about 700,000 market hogs. Roughly the increase in U.S. hog marketings in January from a year ago.
A year ago 53-54% market hogs were 51.20₵ lb. last week 56.44₵ lb. In our opinion, the increase in exports has supported hog prices to the level they are. We certainly don’t need more hogs to be produced and continue to hope export levels push higher.
Who the heck knows how big a sustainable deal will be Coronavirus (COVID-19). We all lived through Swine Flu. Big story, then went away.
We expect that Tyson-JBS have now got their system free of Ractopamine. This should increase exports to China as they have about 170,000 hogs per day. This in itself should increase in our opinion 10,000 tonnes a week to China. We do not believe either company would take out Ractopamine, or its consequences in production without thinking they could move 5,000 tonnes a week to China.
China’s hog price last week averaged 37 RMB/kilogram ($2.40 U.S. liveweight a lb.). Certainly a sign there is still a pork shortage and consumer demand is strong. There are logistics issues due to the Coronavirus (COVID-19), but when there is huge profit potential and real need for food we expect that profits and need will accelerate logistics.
Mexico
Last week we visited Mexico and talked to many producers. Like much of the world, the Coronavirus (COVID-19) has disrupted the supply chain. This has created a degree of uncertainty.
We were in the North-west region of Mexico which is Mexico’s heartland of Asian exports. Pork quality is a big issue due to quality demands of the export market. Producers we talked to hope the U.S. can increase levels of exports to Asia so the U.S. will have less to send to Mexico.
Everyone in North America is hoping that the Phase 1 US-China agreement of $40 billion in China Ag purchases includes massive levels of pork purchases.
Context:
Not to minimize the Coronavirus, but put into context of 1.4 billion people living in China.
260,000 people die a year in vehicle accidents in China, (5,000 a week).
The latest Coronavirus (COVID-19) total death toll in China – 3,097.
Let’s hope for everyone’s sake this too will pass
Jim Long (center) with Miguel Davalos Jr. (left) and Miguel Davalos (right) from Genesus Mexico
Genesus Customer Testimonials
Riverview, MT, USA
“Genesus genetic program works very well for us. Sows produce large uniform litters with good birth and wean lots. Having a good appetite in lactation helps breed back. In our system having an animal with a high immunity sure helps.
Genesus boars produce fast-growing pigs to market with low mortality. The boars are easy to work with and are willing workers. Carcass is excellent along with meat quality.”
Springwater, MT, USA
“We at Springwater Hogs, like the Genesus animals. Sows eat well, milk well, breed back good. The sows wean heavy pigs of uniform size, with low mortality. Boars perform well, are really good to work with. Weight are good and mortality from wean to 290lbs is 1.98%, which we think is very good. Pigs grow well, convert well and finish off well. The service is really good. We are happy with Genesus.”
Pork Commentary, March 2nd, 2020 Jim Long, President-CEO, Genesus Inc.
We all can remember that the Swine Flu outbreak had nothing to do with Swine, but it certainly hurt pork demand. We have lived through Swine Flu, SARS, MERS, Y2K (all computers were going to quit on January 1st, 2000).
Thank goodness the current Coronavirus (COVID-19) problem is not called swine flu. All you have to do is look at the following data on a survey of 737 people re Corona Beer.
The Survey- conducted by 5W Public relations noted:
38% of beer drinkers claimed they would not buy the Mexican beer Corona under any circumstances while the virus spreads worldwide
14% of those queried said they regularly drink Corona beer but would now not do so in public.
The confusion continued as 16% of those surveyed said they weren’t sure whether the Coronavirus was related to beer.
Appears to be a lot of confusion and lack of knowledge in some parts of population. Next week we are going to Mexico on business. Probably will risk it and have a Corona.
Observations
We all have seen the big drop in U.S. Stock Market and lean hog futures. So far during the Coronavirus (COVID-19) break, U.S. Exports have held.
A week ago 42,000 metric tonnes up 18% from the week before.
Since the 1st of January U.S. Pork Exports are up 91% year over year.
2019 =158,043 YTD
2020 = 302,000 YTD. An increase roughly of 20,000 tonnes a week.
Hog slaughter is up about 200,000 a week year to date.
The export increases are about equal to the increase in hog production.
China up 400%,
Mexico up 57%,
Japan 108%.
It’s really, really good to see jump in exports.
Last year this time 53-54% lean hogs were 51.85₵ lb., now they are 55.21₵ lb. A year ago lean hogs went to 75₵ lb. by the first part of April. If exports continue as is and seasonal hog slaughter declines, maybe we will see the same this year.
The wildcard is Coronavirus (COVID-19) but when we look at Global Hog price, we see mostly increases in the last week. In South Korea, which has been hit by Coronavirus (COVID-19) market hogs have gone from January 21st being 89.49₵ U.S. liveweight a lb. to $1.57 a lb., on February 27. Not exactly declining.
We expect consumer behavior will slow purchasing of non- essential items but food (pork) will not see much shortfall in demand.
In the misery loves company front; Beyond Meat (Fake Meat) lost nearly 20 per cent last Friday. In valuation Peak price of shares were $240 last July. They have now fallen below $100. About $1 billion has been lost in stock value. Current stock value valuation is 221 times expected earnings. At some point someone better eat the stuff.
Focus Group – My son cooking at McDonald’s
1 out of 100 are Beyond Meat Burgers. At some point you need to sell something or there is no future.
As an industry our best answer to fake meat is to work to make a better tasting product.
More marbling in our pork will deliver better taste.
Taste drives demand.
Making a better tasting product only makes sense.
Some parts of the meat industry are starting to get it!
At Genesus we have had a concentrated plan to develop better tasting pork for over twenty (20) years.
If every American ate one more meal of pork a month it would be equivalent to 7 million hogs a year.
Article Source: Danish agricultural newspaper “LandbrugsAvisen” Written by Einar Bo Thomsen on January 18, 2020 Article has been translated to English from Danish
Interview with Jørgen Lindberg – Director, Scandinavian Farms-China
It will be pigs from Canadian Genesus, who will play the lead, when the major reconstruction of the Danish-owned Scandinavian Farms Pig Industries starts in China.
Jørgen Lindberg, Director of Scandinavian Farms Pig Industries, Lianyungang, China.
You have had pigs from DanBred since you started in China in 2013. Why do you now switch to Genesus?
‘It is an important decision when choosing, which genes to build your herd on. Therefore, we have examined the market and the various suppliers very thoroughly. Overall, we think we get the best solution with Genesus, both when we look at the agreement and the terms, and when it comes to the pigs we get from Genesus.”
Were you not satisfied with DanBred’s pig?
“Yes – the pigs from DanBred have the best genes in the world, and it went well. We had both a nucleus herd with 1,600 DanBred sows that we owned together with DanBred, and a production herd with 14,000 sows and the production of 350,000 slaughter pigs annually. But we have learned that pig production in China is not the same as in Denmark. We cannot expect our employees out here to manage the pigs as we are used to in Denmark. That is why we are now switching to pigs that do not need near the same thorough care to produce good results”
What is it that the pigs from Genesus can?
“With the Genesus sows we get about 16.5 piglets per litters compared to DanBred’s 17-18 piglets. In contrast, the birth weight of the Genesus pigs is quite a bit higher and the pigs are stronger. In Chinese conditions, we believe that it is an advantage with fewer, but in turn stronger piglets, which easier will get all the way to slaughter. As another important factor, feed is 60 percent more expensive in China than in Denmark. Therefore, it is important that the pigs are strong from birth so that they utilize the feed better and reach the slaughter weight faster”.
Genesus is honoured that Danish-owned Scandinavian Farms has chosen our Genetics. We believe the preceding article summarizes the advantages of Genesus.
What would you do without your farm? It is most likely your
primary source of income and your home. Your family might have lived on that
land for generations. It might even be inconceivable to you that life would
ever look different.
When we think of the reasons why producers may become dispossessed,
what typically comes to mind is financial ruin. In late 2018, when Canadian
pork prices were at decade lows, some producers, unfortunately, made the
difficult decision to shut down their operations. In other, rarer cases, the
banks came knocking. Either situation is far from ideal, but these are not the
only situations in which a producer could have his livelihood taken away.
In a modern world where the wants of a growing, predominately urban public trump the needs of producers, sadly, farmers often lose. Old MacDonald had a farm, until social pressures drove him under, it would seem.
North Carolina producers feel the heat
Andy Curliss, CEO, North Carolina Pork Council takes environmental stewardship seriously. He is shown here in January 2020 standing on a covered digester used to produce renewable energy at a hog farm in his state.
During a breakout session at the 2020 Banff Pork Seminar,
Andy Curliss, CEO, North Carolina Pork Council, brought forth a handful of
public issues facing producers in his state.
One such issue was highlighted in a 2018 article published
in the North Carolina Medical Journal, which suggested an increased risk
of mortality in communities associated with confined animal feeding operations.
The study was widely distributed and manipulated by agenda-driven agriculture
adversaries, but it was also challenged by a researcher at the University of
Minnesota, who effectively demonstrated the limitations of the study.
The data, too, supports a different conclusion. As an
example, in North Carolina’s two counties that account for nearly half of its
pork production, neither of those counties is among the top 25 per cent of
counties with the highest mortality rate across the state.
Another studied cited hog barn odour as a potential cause of
asthma for school-aged children. Even the data used in the study appears to
contradict this claim, as children attending school within a two-mile range of
any farm had no greater instance of respiratory problems compared to children
attending schools more than two miles away. As with the study on mortality,
researchers in Iowa and North Carolina raised objections.
Such instances of baseless complaints lodged against farmers
are not without consequence. There are many examples of how such studies are
taken out of context by activists and mainstream news media to support a
narrative that confirms the biases of those who oppose modern farming.
Even before the North Carolina studies on mortality and odour, other nefarious influences had contributed to a poor public image for the industry. Predictably, much of this campaign was driven by disruptive people, but it required the public support, media platform and legal recourse to become truly devastating.
Duplin County becomes a tinderbox in need of a spark
Central to the odour controversy is the practice of spraying
treated lagoon manure on fields. In North Carolina, the method was banned at
new livestock operations in 1997. For grandfathered operations, the practice
continues to this day.
The timing of the ban was conspicuous, given that many newly built operations were appearing near a golf course where the U.S. Open was hosted in 1999. A long-standing, effective practice of manure disposal was eliminated to satisfy the desires of the professional sports and entertainment industry.
Payne Stewart during the fourth round of the 1999 U.S. Open Championship held at Pinehurst Resort and Country Club No. 2 Course in Pinehurst, N.C., Sunday, June 20, 1999. (Copyright USGA Museum/J.D. Cuban)
Households in Duplin County have a median annual income of
$36,679, which is $25,258 less than the median annual income of $61,937 across
the entire country, and $13,641 less than the median of $50,320 across the
state. Compared to other counties, Duplin has an unusually high number of
residents working in agriculture. The median property value in Duplin County was
$88,800 in 2017, which is two-and-a-half times smaller than the national
average of $229,700. Interestingly, the home ownership rate is 69.7 per cent,
which is higher than the national average of 63.9 per cent.
Historical systemic racial division and poverty play an
important role in understanding Duplin County’s social and political affairs,
and these things should not be overlooked. But for the full picture to come
into focus, it is necessary to examine the issues more closely to determine
which factors and influential players are responsible for generating the
friction. Often, the malicious intentions of bad actors can be found at the
root.
The increased presence of agriculture and higher rate of home ownership suggest that this area is ripe for a potential conflict regarding land use. That conflict has been found in the less-than-glamorous side of animal agriculture. From the perspective of producers, learning to accept the unflattering reality of hog production is simply necessary in this line of work. It is how producers make their living and provide food for those who would likely be incapable of doing so themselves. For a misinformed or ill-motivated segment of the population, that often-unspoken reality becomes an easy target.
Joey Carter fights the blaze valiantly
Following an exploration of issues broadly facing North
Carolina producers, Curliss told the harrowing tale of Joey Carter: a producer
who, for more than three decades, met and exceeded North Carolina state
regulations for hog farmers and was known to constantly upgrade his operation,
based on considerations of animal welfare and the environment. In addition to
hogs, he raises cattle and is active in his local cattlemen’s association. Even
before and during his time as a producer, Carter served as a police officer
(now retired) and volunteer fire chief for the town of Beulaville. He is, by many
people’s objective standards, a model producer and citizen.
In July 2018, a North Carolina jury awarded more than $25
million in a lawsuit against Smithfield Foods – the world’s largest pig and
pork producer, which owns 500 farms in the U.S. and contracts with another
2,000 independent operators in the country. In total, there are 26 federal
lawsuits affecting 86 farms, filed by more than 500 plaintiffs living near those
farms in eastern North Carolina.
“The lawsuits are a serious threat to a major industry,
to North Carolina’s entire economy and to the jobs and livelihoods of tens of
thousands of North Carolinians,” said Keira Lombardo, Smithfield senior
vice president, in a statement.
At the time, Carter was a contract finisher for Smithfield. Carter’s farm was one of those targeted by the lawsuits. Rather ironically, one of the suit’s plaintiffs even lives on property that was voluntarily subdivided from the family’s plot by Carter’s father, purchased and developed five years after Joey had already built two of seven total barns that made up his total operation. To date, the same land Joey Carter’s father started farming several decades ago has been home to four generations of the Carter family.
Complicating the matter further was the imposition of a gag
order against the farmers who were being targeted by the lawsuits. Rather
incredibly, only representatives of Smithfield were allowed to testify in court,
and public comment on the lawsuits by defendants was effectively banned.
“It’s been kind of tough knowing the relationship and how
the community was before this all started, and how it is today,” said Carter,
in a September 2018 interview with the North Carolina Farm Bureau. “It’s really
driving a wedge between the farmers and a lot of people in the community, which
it shouldn’t.”
Partly owing to the demographics of Duplin County, the
debate over the smell of hog manure and detection of fecal bacteria (generated
by a white farmer) on nearby homes (of black residents) has, in some ways,
amplified existing tensions and provided a platform for a wider discussion on
social issues.
The phenomenon is made clear by the fact that the lawsuits against
Smithfield were created by out-of-state lawyers who chose to seek mostly
African-American plaintiffs living near Smithfield farms, which represents a
statistical anomaly, considering the two-to-one, white-to-black ratio of
residents in these areas, according to U.S. census data from 2017. Rather than
seeking to better their communities by urging improvements be made to area
farms, plaintiffs sought financial compensation alone.
Suffice to say, the heart of this dispute goes well beyond
what any producer is prepared to tackle on his own, and while social license
should be the concern of every producer, it is disheartening to think the
problem is being addressed, however adequately or inadequately, through
lawsuits and legislation, rather than stepping back and working for a
community-based solution that benefits all.
“You’ve got to stay positive to survive and get thought it,”
said Carter. “It’s going to be alright; it’s just a bump in the road. In the
end, I really think somebody else is in charge—somebody higher up—and we’re
going to be fine.
“The time we’re in, I think nobody’s safe—whether you’re in the hog business, chicken business, turkey business, cow business. I just don’t know what it’s coming to.”
Joey Carter (left) shakes hands with an official from the U.S. Department of Agriculture, following Hurricane Florence in 2018. Manure lagoons in this part of the U.S. can become environmentally hazardous in severe weather, if not managed appropriately.
Lawsuits have farmers and allies seeing red
In January 2020, the U.S. Court of Appeals heard arguments
from Smithfield’s law firm against the controversial nuisance lawsuits, citing
seven serious errors that resulted in an unfair and improper trial. The U.S.
Court of Appeals previously heard arguments against these lawsuits in September
2018, during which time the farmer gag order was harshly criticized as being
unfair.
Leading up to the January 2020 appeal, the North Carolina
Pork Council joined forces with the U.S. National Pork Producers Council and
other partners to file an amicus brief in support of Smithfield’s appeal.
The appeals process was undertaken with the goal of reversing the punitive damages or ordering a new trial. Rulings are typically issued three to six months after oral arguments are heard. At the time of this article’s publication, no ruling had yet been made.
What is burning in Canada?
In 2018, Ponoka County, Alberta, released its Municipal
Development Plan (MDP), which included restrictions on the development of new
confined feeding operations in a 20,000-acre area where more than a dozen
already exist. In addition to being home to many existing confined feeding
operations, the region boasts some of the highest-quality soil found anywhere
on the prairies for cropland.
The restrictions were detailed in the County’s North West
Area Structure Plan, affecting an area immediately adjacent to the Queen
Elizabeth II Highway—the major roadway between Edmonton and Calgary. This
population corridor includes some of Alberta’s fastest-growing cities and
towns, driving demand for non-agricultural use.
Rather than a concern for odour or contamination, as in North Carolina, Ponoka County’s rationale within the plan states, “There is a strong demand for rural residential parcels, and the County is willing to meet this demand provided that it does not damage agriculture or the environment, or impede the logical and economic growth of urban areas.”
Development plans in Ponoka County, Alberta have re-zoned a sizeable portion of land where many intensive livestock operations are found.
Essentially, the County would like to see the land within
the defined area zoned for residential properties which are not primarily
agricultural. Subdividing this land for acreages would indeed contribute more
greatly to the County’s tax base, but at what cost to the community and livestock
producers?
In response to the plan’s adoption, the Ponoka Right to Farm
Society was formed to challenge the plan in court. The Society now numbers more
than 250 area residents who oppose the County’s direction.
“Ponoka County is a farming community, and the municipal
government should not be setting up exclusion zones and banning new farms,”
said John Hulsman, one of the Society’s board members.
The issue for many producers in the area is that the new
restrictions will limit the growth of operations onto new land, which is a
concern for multi-generational farm families looking to expand.
In Alberta, confined feeding operations come under the
authority of the Natural Resources Conservation Board (NRCB), which has
operated since 2002 under the Agricultural Operation Practices Act (AOPA). The
legislation is the responsibility of the province’s Ministry of Agriculture and
Forestry. Before 2002, licensing and compliance monitoring for confined feeding
operations were the responsibility of Alberta’s municipalities, which is one
reason why Ponoka County’s imposition of the North West Area Structure Plan is
raising eyebrows.
In December 2019, the Ponoka Right to Farm Society launched an appeal with the Alberta Court of Queen’s Bench. At the time of this article’s publication, a court date was set for February 2020.
Hot issues are often complex and diverse
Right to farm is a layered, multi-dimensional topic.
Consideration must be given to the region in which challenges are faced and the
context surrounding the issue.
In Canada, the matter has not reached the same public
proportion as in North Carolina, and the consequences have not been as great. But
it is not so far-fetched to imagine that the winds of change could blow the
inferno in our direction. Is it only a matter of time?
Pork Commentary, February 24th, 2020 Jim Long, President-CEO, Genesus Inc.
Global Price Points (LBS. U.S. currently)
“Anyone can raise hogs. But it takes a near Genius to make money doing it.” – The quote attributed to John Swisher, founder of United Feeds, sums up where we are in the US-Canada hog industry.
More and more hogs continue to push the supply level beyond profitable hog prices. Over the last few weeks, we have attended five different U.S. industry events. At them we heard the same sentiments and/or questions: “When is this going to turn’, “I am tired of not making money.”
Most producers are aware that in just about every country in the world (actually we are not aware of any) producers are making money. Only USA-Canada are not.
Mexico
76₵
Russia
60₵
Brazil
54₵
Spain
72₵
China
$2.42
Viet Nam
$1.52
USA
40₵
Canada
40₵
You don’t need to be a computer and/or ag-economist to figure that US-Canada is sucking air relative to the rest of the world when it comes to hog price.
There is no doubt that USA-Canada have both suffered from the trade issues both countries have had with China.
Just when things appeared to get somewhat settled, the Phase 1 agreement finalized and Canada was back in China market, the Coronavirus (COVID-19) has hit and disrupted the market. It would be anyone’s guess how Coronavirus (COVID-19) will get sorted, but all indications are the Chinese government is putting a priority on ensuring food movement. That is not to say containers carrying Pork are not being slowed by issues at ports and trucking in China.
Despite these issues, U.S. Pork Exports to China continue near record levels. We would have expected U.S. pork export sales to China to have increased further, if not for Coronavirus (COVID-19).
The Phase 1 commitment of China to purchase more U.S. ag products ($40 billion total) should lead to U.S. pork exports surpassing 25,000 tonnes a week (currently 15,000), or about another 100,000 more hogs a week equivalency. By comparison- Europe shipped about 40,000 tonnes a week to China in 2019.
When we hear that logistics will limit U.S. exports to China, we don’t believe the U.S. logistic capacity can’t match European logistics.
Other Observations
U.S. Sow slaughter is up.
January 2019 – 265,300,
January 2020 – 283,100. (Up 18,000 – same number of slaughter days)
We don’t believe there will be many new sow barns constructed in 2020 from discussions we had over the last few weeks.
Market pricing and packer capacity is braking expansion
Has there ever been expansion when producers are losing money?
Purchase of J.H. Routh Packing Co. in Ohio by HK Property Holdings – a joint venture between Holden Farms and Kalmbach Feeds, is another indication of large producers seeing packer margins and wanting to be part of the pork supply chain.
We expect the new ownership will increase daily slaughter numbers towards the plant’s capacity (about 4500 a day).
As time goes on, we expect further push for producers to want to integrate into packer equation.
Not sure who all reads this commentary, but from the reaction last week it appears Genetic competitors do. The appointment of the new CEO of Topigs-Norsvin Coop got a lot of laughs in our industry. His previous experience as CEO of a division of deadstock- rendering company- Darling International was found to be funny.
Months and months of search to replace former CEO who went to a Grass Seed company, then to decide a Senior deadstock person is the background you need for the future to drive a Coop Swine Genetic company is interesting. Maybe the search committee motto was:
“It’s easier to give birth then bring the dead back to life.”
Genesus Customer Testimonials
D & S Brassington, United Kingdom
“We started with Genesus Duroc Semen in 2014 and we noticed the piglets were more uniform with a higher appetite and reaching slaughter weights of 85kg (deadweight) 10 days earlier.
We decided to switch 100% to Genesus (maternal and terminal). Today we are weaning more pigs per litter, averaging 10 days less to market and grading has improved.
Choosing Genesus was the best decision for us.”
Fairlane Farming Co., Canada
“Genesus Landrace x York = a true F1 that produces lots of big viable pigs that are fast-growing and become great mothers with very good feed intake in lactation and return to estrus in 5 days or less.
True Genesus F1 x Purebred Duroc = the best pork in the world. I say this every year, I would recommend Genesus to anybody.”
The pork show season is almost over and we get to visit with a lot of people in the pork industry during this time.
I am going to piggy back off Jim Long’s comments in his commentary about questioning the need for lean hog futures. I don’t know of any comment Jim has made that provoked so much discussion at a pork show.
I believe Jim is correct, algorithm and day traders are capitalizing on the confusion and mixed messages coming out of Washington D.C. and China. Dr. Joe Carr explained it to me as if the fundamentals have become the boundary lines of the football field, and although that may define the basic rules, the traders can run all over that football field in any direction they want.
There is absolutely no fundamental reason hog futures are where they are right now, maybe because traders are controlling the market? I have been quite involved with bankers from Missouri to Minnesota and they too are very disappointed in the lack of response from hog futures.
The fact that 25% of the hog population is gone should be affecting the market in a positive way for producers. Bankers used to use an inelastic number for hog prices of 4, meaning for every 1 percent change in the supply, the price should react the opposite by 4%. I do not need a calculator to tell you that 25% fewer hogs should mean much higher prices then we are seeing today.
Bankers nor market analysts can’t explain why this is happening. They are as confused as anyone in the pork industry. Maybe the Democrats should investigate the trading practices in Chicago instead of President Trump. A very smart man once told me to “capitalize on confusion.” I am thinking he must have worked in Chicago!
PEDv is starting to pop up sporadically in herds and PRRS is always a problem but these issues probably won’t affect the markets either. The bottom line is that there is a huge gap of pigs in China and they need to replace that loss.
When will the market be a true barometer for supply versus demand and not what traders think pork is worth? Again, traders seem to be able to “capitalize on confusion” and the producers are suffering from their manipulation of the Chicago Board of Trade.
Genesus Customer Testimonials
Country View Farms, NE, USA
“The hardiness of the Genesus females continues to mpress us. We broke with PRRS in January 2019,but it was amaing to see the Genesus animals desire to live ad get through it. The gilts we purchased from Genesus have been great”
Hutterville Farming, AB, Canada
“Little over halfway through the conversion to Genesus animals; and so far we are seeing huge difference in live born (over 1.5pigs extra). Genesus sows areweaning nice even litters easy to manage and good geed intake in lactation. Overall nicely satisfied for now. Salesman 5 stars.”
Pork Commentary, February 18th, 2020 Jim Long, President-CEO, Genesus Inc.
The China Agriculture Industry and particularly the Swine Industry have been greatly affected by African Swine Fever (ASF) and now the implications of Coronavirus which has restricted people and transport movement. To say it’s a bad situation is best illustrated by the translated key points from the chairman of China Agriculture Association – MR. Xirong Li in an interview with Chinese media.
Translated Key Points from Mr. Xirongs interview:
First: The obstruction of logistics seriously affects the production supply and the trade of live livestock and poultry.
Since the outbreak of coronavirus, major public health emergencies have been launched at the first level, resulting in the control of roads and motor vehicles. As the consequence, the transportation of pigs, young breeding stocks, eggs, poultry meat, feed, veterinary drugs, vaccines, equipment and other production and living related materials are greatly affected.
Cross province live livestock and poultry sales and transportation links are broken. Live livestock and poultry cannot be transferred between enterprises to meet normal production, and business process is interrupted.
At present, all or some cities and counties in 27 provinces have closed the live poultry market, and the live poultry in the market cannot be sold. The poultry industry has suffered heavy losses.
According to the incomplete statistics of the association, it is preliminarily estimated that as of February 12, the loss of poultry industry has reached 15.865 billion yuan (2.25 U.S. billion)
Livestock and poultry industry is a special industry with poor ability to resist market risks. Once the industry is destroyed, the recovery period will be a very slow process.
Second:
The slaughterhouse cannot be started or the operation is insufficient and affects the production and marketing of livestock and poultry.
The procedures to reopen the operations of slaughtering enterprises is complicated: the road restrictions on the flow of people, resulta in a shortage of manpower, an so the slaughterhouses cannot start operation, or the operation is insufficient which directly leads to the failure of sales for poultry, commercial pigs, cattle, sheep, rabbits and others.
Third: The production staff is in short supply and the cost is rising.
Affected by the delay of returning employees and the extreme shortage of labor force, the enterprises cannot complete the established work plan, the production index decreases and so the cost increases.
Fourth: Some enterprises are short of working capital and have difficulty in capital turnover.
Due to the dual threats of ASF and coronavirus, the enterprises have invested heavily in biological safety control and prevention, including the increase of inventory of various materials, thus raising the warehouse cost and plus the new outbreak of coronavirus, which seriously affects pig sales, and the lack of liquidity and difficulties in capital turnover.
Fifth: It will affect the purchase of materials, delay the commencement time of new projects and introduction of breeding stocks.
It is difficult for enterprises to purchase materials for life and epidemic prevention, especially face masks and disinfectants.
New projects under construction in some enterprises are affected to varying degrees.
Due to the restriction of personnel flow and road traffic, many enterprises cannot introduce new genetics, which affects the follow-up commercial production.
Given above challenges, the Ministry of Agriculture and Rural Affairs, National Development and Reform Commission, and the Ministry of Transport jointly developed a policy to build the Green Corridor for the priority products including feed products, corn, soybean meal and other feed raw materials, breeding livestock and poultry, piglet and young birds, aquarium fry, livestock and poultry marketing animals, fresh milk, dairy products, fresh aquatic products, chilled and fresh pork, transferal bees, etc.
We believe Brett Stuart of Global AgriTrends has as good a handle on China’s Swine Industry as anyone anywhere. Here are some comments published in the Western producer by columnist Karen Briere from Brett’s recent talk in Saskatoon Canada:
“Disease is a global market game-changer.”
“The hog market seems to be having a hard time believing what is happening in China”, Stuart said. He called it “irrational.”
The country officially says 40 percent of its sow herd is gone but he estimates it at closer to 65 percent.
“In context, North America has about 6.5 million sows and China just lost 24 million.”
“I look at U.S. hog futures and no one will believe it. We’re not even making money on hogs. They’re pretty suspicious of this, especially the investors.”
“It’s just not there,” Stuart said. “By my math, I say China is going to have about a 24.5 million tonne gap in protein in 2020.”
“Current global pork trade is about eight million tonnes.”
Stuart said “there is nothing that can be produced in the volume China requires to fill the gap. Chinese pork prices are going to stay very high for a long time as a result.”
He added that “China’s claims that it can restore normal pork supply by 2021 is simply propaganda; there aren’t 20 million sows on the global market.”
Topigs Norsvin Appoints New CEO
In the world of Swine Genetics, we pay attention.
Topigs Norsvin after a several month search has appointed Villaume Kal as its new CEO. Mr. Kal replaces Martin Bijl who left in 2019 to join a company selling Grass Seed.
Mr. Kal is the former CEO of Rousselot, part of Darling Ingredients. Darling Company is where we used to take our deadstock for rendering.
Kind of find it funny, maybe even poetic that a deadstock company is training ground for a swine genetics company CEO. Strange but interesting world.
Genesus Customer Testimonials
Newport South, MN, USA
“The Genesus Duroc sired pig hits the ground running, the pig finds milk and never slows down. Very easy starting pig, transitions well to pellets and then to grind and mix. They never slow down even in our barn where we move them five times. The pigs never skip a beat and have a very low mortality rate from wean to finish. The Duroc pig can withstand everyday health challenges and is very uniform and finishes in a tight group. This pig has a huge appetite, and it shows to be beneficial through health challenges. This all starts in the farrowing room thanks to the Genesus F1, she has a big appetite, milks all her pigs and gets them off to the right start.”
Ferme Durand, MB, Canada
“We are very proud to be associated with Genesus whether it be with the executive or selection team. All are precisely important to our relationship. Pig performance and temperament are second to none – making our care for animals a great joy.”
Given the high-level nature of The Pork Show, it is no coincidence that the conference is held next door to the Quebec National Assembly (provincial parliament).
With a view of the walls of old Quebec City, and on the
doorstep of the province’s National Assembly, guests from around the world
gathered at the Quebec Convention Centre for The Pork Show on December 10 and 11,
2019.
Canada’s oldest major city (now more than four centuries
old) might seem an unlikely location for a pork conference, but the province is
our country’s top pork producer by volume, and it is here that many in the
global industry are looking when it comes to innovative production and models
for producer profitability.
The annual conference, now in its sixth year, is the largest
pork-specific conference in Canada and routinely welcomes more than 1,000
guests from across the pork value chain to participate.
Big names and big ideas dominate the discussion
Vincent Cloutier, Director, Economic Affairs, Quebec Pork hosted the African Swine Fever discussion panel on the first evening of the conference.
The first day of the show featured a panel discussion on
African Swine Fever (ASF), with participation by Dr. Aline Dimitri, Executive
Director, Animal Health, Canadian Food Inspection Agency (CFIA); Martin
Pelletier, a contributor to the Quebec Swine Health Team; and Sylvain
Fournaise, Vice President, Food Safety and Technical Services, Olymel.
The second day of the show was kicked off with a
presentation by Jean Charest, former Quebec Premier and partner with McCarthy
Tétrault LLP. He is a veteran politician with much experience on the side of
trade negotiations.
In 1994, Jean Charest was chosen to lead the federal
Progressive Conservative Party and in 1998, he became the leader of the Quebec
Liberal Party. Charest then broke a 50-year provincial record by winning three
consecutive election campaigns in 2003, 2007 and 2008. Charest helped negotiate
the Canada-European Union Comprehensive Economic Trade Agreement (CETA), signed
in 2016, though only partially in force, and he is currently a director with
the Asia Pacific Foundation of Canada.
To Charest, there is an emerging agricultural labour crisis that has been spurred by the aging of populations in the western world, along with the rise of political populism, contrasted by a growing middle class in the developing world that is hungry for meat. Tackling these challenges is exacerbated by political tensions that underly government decision-making.
Jean Charest, former Quebec premier, suggested that geopolitical tensions and domestic political sentiments have profoundly impacted agriculture.
“The rise of nationalism and economic crises in some
countries has changed the game forever. It’s the new reality,” said Charest.
“These are warning signals. The country that moves fastest to recruit and
integrate immigrants will be the one that comes out victorious. Canada is a
country of immigrants, and the agriculture sector needs this.”
Brett Stuart, President, Global Agri-Trends presented a
global pork market update, and Robert Saik, President, Saik Management Group
presented on the future of food trends.
“Try to find a positive movie on Netflix about agriculture—you can’t,” said Saik. “We and our school-aged children are fed fear on a daily basis, and it’s affecting public perceptions of the industry.”
Guests expand their scope of knowledge
After lunch, breakout sessions were hosted on three topic
areas: innovation and technology; health and livestock management; and food
marketing. Each session included a half-hour presentation from two different
presenters, making for a condensed but efficient format.
Breakout sessions were followed by Awards of Excellence,
given to one producer and one industry partner that has demonstrated
outstanding work in the past year. The awards were presented by André
Lamontagne, Minister, Quebec Agriculture, Fisheries and Food and Jean Larose,
Executive Director, Quebec Pork.
The winner in the producer category was Ferme Pouvaco Inc.,
for their efforts to improve animal welfare and environmental practices
on-farm. The winner in the industry partner category was the Quebec Pork
Development Centre, a centre of expertise that contributes to knowledge
transfer activities and research.
To complete the formal portion of the program, Dr. Luc
Dupont, Associate Professor, Faculty of Arts, University of Ottawa presented on
building an effective business marketing plan, which is part of bridging the
gap between public perception and the reality of pork production.
“You’re all doing wonderful things, but this is not enough; you have to tell people,” said Dr. Dupont. “If you don’t take your space, someone else will move in. You have to blow your own horn. Animal activism is a prime example of how the conversation can change shape.”
AQINAC serves Quebec’s feed grain industry
Sébastien Lacroix’s company, AQINAC, is a proud presenter of The Pork Show.
“We believe this event is an important opportunity for the
entire industry,” said Sébastien Lacroix, Deputy General Director, AQINAC.
“Quebec producers and partners are on the leading edge, and we want to share
our expertise with guests, just as much as we want our guests to bring their
great ideas to us.”
AQINAC supports more than 200 active and associated
livestock and poultry feed grain members in the province, in addition to grain traders
and suppliers of goods and services. The organization serves most Quebec
producers involved in animal production.
The organization represents an annual production of 4.6
million tonnes of feed equivalents, which are used by more than half of all the
province’s producers of hogs, poultry, turkey and eggs. This translates into
more than $2 billion in feed sales. Nearly two-thirds of the total volume of
Quebec grain passes through institutions that are members of AQINAC.
While the first commercial feed mills appeared in Quebec in
the late 1930s, it was not until 1961 that a first group of millers was born.
Originally established as the Association for the Expansion and Protection of
the Agricultural Industry in Eastern Canada Inc., in 1963, the organization
became the Professional Association of Quebec Millers.
In the mid-1990s, the association’s membership became more diverse when it welcomed members of the Quebec Division of the Animal Nutrition Association of Canada (ANAC). To reflect this diversity, and to mark the integration of grain traders, the organization changed its name again in 1996 to become the current AQINAC.
Quebec’s culinary excellence on display
The first evening of the conference featured networking
opportunities and the presentation of research posters by Swine Innovation
Porc, along with a cocktail reception featuring local beverages, in addition to
pork dumplings and pulled pork sliders.
Throughout the event, guests were privileged to enjoy the
best of what the province has to offer. The experience was most obvious during
the plated lunch on the second day of the conference, which included cuts from
the belly of a young, milk-fed pig (porcelet), served with a pepper gravy,
bacon-and-cheese mashed potatoes and honey-roasted vegetables. The menu was
created by a culinary team that won a competition to have their meal included
in The Pork Show’s program.
The second evening of the conference again featured cocktails
and networking opportunity, followed by a casual food and beverage tasting
event, during which guests were invited to sample the finest of Quebec fare,
including charcuterie, hot appetizers and assorted samples of wine, beer and
spirits.
Swine Industry Random Observations
Pork Commentary, March 16th, 2020
Jim Long, President-CEO, Genesus Inc.
We have to scour for anything to write up about other than the Coronavirus. Not much we know, unlike TV news anchors who have become virus experts in the last few days. So this week we are going to make some random observations- maybe relevant or maybe not.
• The U.S.D.A 53-54% average lean hog price increased from 56.44 to 58.47 in a week.
– A year ago 53-54% was 53.97
– Almost $10 a head higher than a year ago
• On Friday U.S.D.A pork cut-outs reached 70.04₵ a lb.
– First time in several weeks over 70₵ a lb.
– Increased price means better demand.
• U.S. Pork Exports set another weekly high at 44,500 metric tonnes, led by China at 16,120 metric tonnes
• European Hog Prices remain high.
– Spain at 1.54 Euro/Kg., is at record levels (78₵ a lb.)
– China’s average price is 36.66 rmb/Kg. ($2.38 lb.)
Our Farmer logic
U.S. lean hog prices rising, U.S.D.A. cut-outs increasing, U.S. pork exports at record level and European Pork is more expensive, while hog prices in China are at levels beyond normal comprehension.
Sounds like a recipe to bake a happy cake?
Not so Fast…
We have lean hog futures.
• They have collapsed despite many positive market directions.
• Lean Hog Futures based in Chicago – (Las Vegas with no rules) seems to create instant negativity in our industry.
• No other hog producing country in the world has lean hog futures except the U.S.A.
• 92% of the world hog industry seems to have managed to operate without lean hog futures.
• From what we can see every other country has higher hog prices than the U.S.A (Canada)
Quite the system, Canada is the wagging dogs’ tail of the U.S. futures and pricing system.
Last time we wrote about our observations of the effect Lean hog futures we got more response comments than any time over the past twenty years of writing. All supportive of the observations except one.
We know that nothing will change- lean hog futures will continue as long as money flows into them and there is a whole industry of brokers and agents collecting commissions on the activity with an obvious vested interest to perpetuate the current system.
To Summarise:
• U.S. Hog price rising
• U.S. Pork Cut-ours rising
• U.S. Pork Exports – record level- including China
• European Hog prices – near or at record levels
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