World Pork Expo Report
Last week we attended the World Pork Expo in Des Moines, Iowa. Our observations:
- The World Pork Expo put on by NPPC started in 1988. We have been to every one of them. Our industry has changed significantly over the 36 years. Now at Expo less producers, less exhibitors, results of less people selling to less people. Industry consolidation has eliminated thousands of independent producers. It’s our industry reality.
- The consolidation of our industry can be seen in the decrease of exhibitors selling swine genetics. Years ago, at the Expo there would have been several dozen. This year not more than seven with most if not all having some degree of global presence. Less selling to less, surviving suspects (PIC, Genesus Topigs Norsvin, Hypor, AcuFast, DNA, Danbred).
- The Expo was two full days this year (last year 2.5 days). In our opinion should be three full days (Tuesday – Thursday) giving opportunity for visitors to be spread out. Costs for exhibitors would be almost the same three days vs. two and bring exhibitors more value.
- There is next to no new sow barn construction ongoing in USA from what we can determine. Any sow barn that quits is a minus to production base.
- Last week Genesus released our 2024 World Mega Producer list. We had several Mega Producers visit us at our Genesus tent. The reality of world production Mega Producers is now 27% of global production. 28 years ago, at the first Expo in 1988 there were no Mega Producers.
- We were told as we didn’t attend (this is hearsay) that one of our Industry Chicken Little Economists spoke and predicted that producers would lose money over the next year and the only way to correct profitability would be to cut 1 million more sows. Producers we spoke to after that attended this talk needed to be put on suicide watch. A year of losses after 18 months of record losses. If this would be true to quote one of U.S. presidential candidates, we are “going to hell”.
- We wrote repeatedly that we need to have a revolution in our industry to save us from ourselves. The fact after 18 months of losses another year could be even contemplated should be enough to want to make a revolutionary change. We write continually our belief that Pork taste challenge is handicapping prices. Beef cut-outs $3.15 lb. Pork cut-outs $1.02 lb. It’s obvious consumers will pay for taste and they are not seeing Pork deliver.
A number of people came to our tent to discuss this as our industry challenge. Many producers don’t even want to eat their own pork they produce. Won’t order it in restaurants and then wonder why we have demand challenges.
Unless we address pork demand and begin delivering pork taste to compete with Beef our profitability will be challenged. We are hopeful that some in our industry are recognizing that we need to change. Worshipping at the false alter of lean without taste is our “going to hell”.
Summary
The last few weeks any industry optimism has been smashed by the collapse in lean hog futures. What looked like a decent next twelve months has now got negative. Our opinion is lean hog futures are not reflective where markets will be. We believe the herd liquidation will cut supply, PRRS has sprung up with significance in the last few weeks killing pigs after a several month lull.
China hog price has increased significantly in the last 8 weeks (up 30%) as hog numbers plummet from their liquidation from 18 months of losses (like the U.S.). Last week some markets in China hit 20 RMB ($1.25 U.S. liveweight lb.). China pork imports will increase at the higher price levels supporting all global export countries.
Pork Producers are optimistic by nature. Maybe that’s why so many are Trump supporters. Knock them down and they keep getting back up. At the Expo we talked to an industry that by nature is optimistic, but it’s not optimistic, we are knocked down, but we are fighting to get back up. Maybe little optimism but still with hope. Resilience, maybe not rational resilience, but we are who we are.
Genesus tent at the 2024 World Pork Expo
Categorised in: Featured News, Pork Commentary
This post was written by Genesus