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.
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.”
U.S. Hog Market Having Rough Ride
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:
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.
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
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”