Jim Long President – CEO Genesus Inc.
December 16, 2013
Manitoba Hog Days ReportLast week we attended Manitoba Hog Days which was held in Brandon, Manitoba.
- Manitoba has about 300,000 sows – 40% held by corporations – the rest independent producers.
- Optimism – Producers see cheaper feed and strong lean hog futures. Everyone expects to make some real money in the next year.
- PED There is no PED in Manitoba and Canada up to now. There is much talk how to keep it out. Most believe it will come if it comes on trucks-trailers that pick it up in the US.
- Grain is plentiful – Manitoba and the province next to it Saskatchewan had their largest grain crops ever.
- The Manitoba Government imposed a moratorium on construction of any new swine buildings a few years ago. This has increased the cost of contracting existing finishing barns. They range from $55-60 per head space; far higher than the $38-45 in the USA. It’s what happens when no new barns can be built, there is no other options and less competition. It puts the Manitoba pig owners at a competitive disadvantage and is a trigger to keep sending about 60,000 early wean and feeder pigs a week to the US to be finished (there are no barns for them in Manitoba). Meanwhile because there are no new barns to finish pigs, the largest slaughter plant in Canad, Maple Leaf scrambles to find hogs to fill their shackles.
- As far as we understand Chicken and Cattle barns can still be built. In the eyes of the socialist government in Manitoba that manure must be no threat to the environment? Next thing you know a government will think it’s a good idea to subsidize burning grain to fuel our cars.
- At Hog Days there were quite a few feeder pig brokers looking for pigs due to PED, normal seasonality, lower feed costs and strong lean hog futures. They told us some spot cash feeder pigs $90 plus, early weans in the 70’s. They don’t expect much higher prices for early weans but expect some feeder pigs to sell for $100 plus in the coming weeks.
- Last week we heard a vet in the USA which has been involved in several PED breaks estimate that a PED break will cut annual production in a heard by 2.5 pigs per sow per year. If 2 million sows get it, that would be 5 million fewer hogs, or almost a 5% reduction in US production. A huge market mover. We would not be surprised to see $1.10 lean hogs this coming summer.
- Manitoba Hog Days was well organized but in our view made a mistake to go to one day from its previous two. As an exhibitor we have the same costs but less of an opportunity in time to speak to people. We were very busy at the Genesus booth (Part of this is we have more customers in Manitoba than our competitors). At one day, visitors are less apt to stay over. At one day, there was not time to dialogue with other exhibitors. We believe that a trade show brings many components, business, education and inter personal dialogue. A one day show 10AM – 4PM doesn’t allow this to happen. Hopefully organisers will reconsider and return to a two day show.
SummaryProducers in Manitoba are optimistic. Many of the independent producers own grain and feed it to their farrow to finish operations. They have had record crops. Most realize grain in not going to be very profitable for the next couple years. Feeding their grain to their hogs is the best was to make money. Due to the building moratorium, there will be no expansion other than a handful of empty sow units that could get restarted.
Categorised in: Pork Commentary
This post was written by Genesus