Jim Long President – CEO Genesus Inc.

European Union Continues to Produce More Hogs

March 22, 2016

The European Union continues to have hog marketings increase despite financial losses of $20 – $25 per head. Marketing 2^nd quarter this year are projected by the EU commission pig working group to increase 1% year over year. 3^rd quarter about 1%. It’s only in the fourth quarter a decrease of 1.5% is projected. Last week in Brussels new support measures were announced for the pig meat sector following a meeting on Monday and Tuesday. Regarding pig meat, the commission will give its full consideration to a temporary acceptance of state aid that will allow member states to provide a maximum of 15,000 euros per farmer per year and no national ceiling will apply. This can be done immediately. In response to the proposals for a new private storage aid scheme for pig meat, already ear marked pig meat sector last September will be supplemented by an additional amount to reflect the market disturbances in those sectors. At the meeting the European Commission acknowledged the total lack of progress regarding the reopening of the Russian pork market. However the commission pointed out progress with US, Japanese, Brazilian, and Ukrainian negotiations despite sensitivities from France among others regarding beef and TTIP. The continued pressure on consumer and export demand in the face of tough economic conditions leads to major stakeholders to review where the market is going. Vion, one of the major European pork producers commented “With the lean meat percentage of Dutch pigs up to 59.1%”, Vion comments “that the pigs are too lean for optimal utilization.” (Source Boerderij Vandaag). The continual chase of ever leaner pigs has destroyed taste and flavour. It’s done nothing but hurt per capita consumption of pork. The Genetic decision to utilise Pietran or hyper lean synthetics has been paramount in the taste – flavour destruction. The quest for niche markets of antibiotic free, housing etc. is tangible but the real growth for pork demand is producing more flavourable consistent pork. We have a passionate belief in this at Genesus, we have been doing weekly Duroc carcass analysis for 18 years on marbling, color, tenderness, primal size, etc. A generation of intense genetic development is paying off. Last week we were with buyers, there will be 235 Duroc boars going to Europe. These European buyers and packers realise what Vion was saying. Too lean doesn’t work. Pigs that grow, live, and people want to eat is what really matters. One of the challenges of our industry is the rewarding in some grade systems for leaner hogs. It’s a false economy for Packers and Producers. It is any wonder the world’s largest pork packer Smithfield Foods no longer grades its hogs. By taking the emphasis of leanness Smithfield is able to push to a better meat quality. Smithfield the world’s largest hog producer and pork processor with over 800,000 sow’s uses to the best of our knowledge only Duroc boars. That is belief and commitment.

“Managers do things right. Leaders do the right thing.”

~Warren Bennis

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