Pork Commentary, March 13, 2018
Jim Long, President – CEO, Genesus Inc
December United States and Canadian Hog Inventory Report
The USA-Canadian market is linked in many aspects: pork trades both ways, Canadian Feeder Pigs, market hogs, sows are sent from Canada to USA. Both countries chase similar export markets. Last week United States and Canada Inventory was released for December.
We added 2012 to show the jump in the breeding herd, etc. over the last five years. Breeding herd up almost 450,000; market hogs jumped 8 plus million; more sows farrowed and six-month pig crop, up about 7 million. Certainly, more pork being produced, and market weights have also increased.
Year over year, 2016-2017, inventory market hog numbers have increased about 2 million head – if we use 26 weeks birth to market, that is about 75,000 more hogs to market a week. US Packing Capacity has increased on a shift basis – 125,000 per week.
Canada’s market hog inventory is up 380,000 year-over-year; these hogs will probably be marketed in Canada. That’s 14,000 per week on a 26-week cycle. Take that off the increase of 75,000 market hogs per week.
The new US packing capacity will more than handle the production increase.
The challenge will be moving the pork at a profit. Domestic and Export markets must remain strong. In January, year-over-year, pork exports were up 6.2%; from 457.96 to 486.45 million pounds. The US dollar is weak compared to the Euro and that is helping finding customers. Mexico (162.80) and Japan (109.32) million pounds continue to lead the way as the largest volume pork buyers.
We believe going forward we will have continual incremental gains in production. The breeding herd is growing about 1% per year and we expect that to continue. Its all the more reason we need to support the proposed US voluntary grade change. More marbling and redder pork will enhance taste and flavor. People vote with there money for taste. All you have to do is look at last Friday Pork Cut-Outs values.
Bellies have taste and flavor. Our industry has taken the pendulum too, lean on Hams and Loins and have destroyed some of our demand. We need to address the obvious; it only makes sense to deliver what obviously the consumer wants – Taste and Flavor.
Dr. Pearse Lyons
We never met Dr. Pearse Lyons, but by all accounts, he was a man who made things happen as the founder of the global company Alltech.
Last week Dr. Lyons passed away at age 73 of an acute long condition that developed during his recovery from heart surgery.
Dr. Lyons, born and educated in Ireland moved to Kentucky in 1976. In 1980 he started Alltech in his garage with a $10,000 investment. Alltech is now a Global Leader in Animal Health and Nutrition companies, employing more than 3,000 people with a presence in 128 countries.
Dr. Lyons obviously was a person of high energy as he started his day at 3:50 am. The Sunday Times estimated his wealth at over 2 billon US dollars. Not bad from a $10,000 start!
Dr. Lyons is famous for not only his innovative products but his astute marketing and sales ability. The Alltech sales and marketing, especially marketing, has been leagues above most agriculture companies.
Agriculture as lost a unique and talented entrepreneur with Dr. Lyons passing. Our condolences to his wife and family.
In our job we get to interact with many interesting and talented people and companies.
Last week we spent several days with some of the senior management of CP
A global Mega Producer, CP manages 800,000 sows today in production, mainly in China, Vietnam, Russia and Thailand.
Plans to increase production to get to 60M market pigs in the next ten years. New construction is on-going with several farms in process.
CP owns their slaughter and processing plants and are adding several new plants in the upcoming years to accommodate the market pigs they are wanting to produce.
Has own food store – Lotus (like a super Walmart) and owns >7000 7/11 stores.
CP is involved in chickens, ducks, pigs, dairy, and aquaculture. They are also one of the largest feed manufacturers in the world. The 4 main businesses are feed, farming, food production, and retail. They are unique in that they truly have a vertically integrated system. They grow grain and make feed, then raise animals, process them at their plants, and own the retail stores the product is sold in.
CP is a publicly traded company on the stock exchange in Thailand and on the Dow Jones Sustainability Indexes in 2015.
Genesus genetics has already suppled several thousand breeding animals to CP in China.
There are estimates, that we have to double global food production by 2050.
To double pork production we will need to produce another 1 billion hogs per year
China with 1.4 billion people has a huge appetite for Pork, and CP is one of the major players intent on meeting this need. The world is a big place, people like Pork and the future is good for pig producers who continue to adopt to the newest technologies.
Categorised in: Featured News, Pork Commentary
This post was written by Genesus