Jim Long, President-CEO, Genesus Inc.
This past week, after the World Pork Expo, we have travelled around the Western Midwest (Iowa – Nebraska – Kansas – Colorado – Minnesota). After 15 months in Canada’s Covid locked-down it is nice to be able to travel to Genesus Farms.
The Midwest, appears to us, to be over Covid restrictions. All seems to be totally opened. Seeing a mask is rare.
“Help Wanted” signs, including multiple giant billboards, are advertising jobs with starting wages included. One we saw yesterday – $30 an hour with $5,000 signing bonus. The U.S. has lots of jobs available not only in the swine industry but all sectors. Many employers have pointed out Government unemployment top-ups are keeping people from needing to work. Strange situation.
PRRS is tearing up too many farms – abortions, sow deaths, wean to finish mortality (up to 40%). One large producer told us, after their experience with 144 PRRS, solution now is to empty sow farm asap after break. The ongoing losses are too great to try to do herd closure. In our opinion the losses due to PRRS will be a significant factor in hog supply.
“Prolapse Is Coming”
“Prolapse Is Coming” is a real factor in sow farms. Sow mortalities over 15% are common with ongoing zero value sows. We are totally amazed the degree of this calamity. Many producers are being told by the source it’s their feed, water, management etc. The reality is its genetics. Own up and compensate? This is a real issue cutting production, dead sows don’t have pigs.
Better Tasting Pork
As we travel, we have a giant cooler of Genesus loins and ribs – we want people to try better tasting Genesus pork. No genetic company claims to have pork that tastes like cardboard (even if it does). The fallacy that any Duroc will make pork better is similar to thinking every Landrace or Yorkshire is the same. Genetic spread is a fact. We want people to compare and decide. Our industry needs a better tasting product to pull up our per capita consumption from the flatline of the last twenty plus years. Increased consumer demand is what will sustain higher hog prices. Does the Duroc you use qualify for Certified Duroc Program of NSR? If not, is this even a real Duroc?
The markets are volatile. Corn/Swine futures are running up and down. We have no opinion what Grain will do. Crops look good in Nebraska, High Plains of Kansas. Parts of Minnesota need rain, but today we are in Minnesota and its raining. We expect the Grain futures will continue other frantic action in the coming weeks. This is an industry not for the faint hearted.
China’s pork market is in freefall
The Chinese market is in freefall. Prices were plus 35 rmb per kilogram ($2.52 U.S. liveweight a lb.) in January. Last week 14.65 rmb per kg or $1.05 U.S. liveweight a lb. Hogs have dropped $350 U.S. per head since January! China weaner pigs were $85 U.S. last week, at first of year they were $250-300. Pigs bought January as weaners are going to market with $150 per head loss. China corn $11.50 U.S. a bushel.
We have told collective value of China Listed Public Companies have lost $85 billion U.S. in value since January. That’s a huge decrease. Another source from China told us that the Public Listed Companies are collectively losing $20 million U.S. a day, (about 6 million sows of production). Translate that across the country and it could be $100 million plus a day. All who can remember 1998 in USA, large swine investor firms failing – is 2021 China’s 1998?. Maybe third wave of ASF in China will spike prices.
We still believe that hog prices in China have been impacted by rapid selling of ASF pigs before they die. We still expect a price recovery in a couple of months. We also believe that sudden collapse of company stock values will dry up capital from exuberant China investors. We expect China’s expansion has had big brakes put on. USA 1998 was the end of the massive new construction of mega systems; 2021 China will likely be the same.
Our travels have led to several discussions on current building and feed costs. Both up significantly. Our sense, these two factors are tempering any expansion and when combined with PRRS and labor issues, it becomes a real factor to slow things re expansion.
Last week it was announced that farmer-owned pork processor Wholestone Farms is planning to build a new pork slaughtering and processing facility in Sioux Falls, South Dakota. Project cost $500 million. Wholestone began in 2016 as a vision of Pipestone, a large veterinary clinic who also manages producers’ farms. Luke Minion of Pipestone and Chairman of Wholestone quoted in SiouxFalls Business; “Wholestone Farms is a partnership. I have 220 partners in Wholestone Farms, and that’s an awesome statement to make together.” For all producers, whether partners in the project or not, increased packer capacity is good. The plan is to have 3 million head a year harvested in its first year of production. At this point zoning of site needs approval and it’s not clear if financing for project has been obtained. Full article link below
Jim Long and Spencer Long in a Genesus Nursery
This post was written by Genesus