Jim Long, President-CEO, Genesus Inc.
U.S. Sow Herd Expansion Feedback
In last week’s commentary we wrote:
“We will send out a challenge. If you know of a new sow unit in USA stocked this summer or under construction now, let us know. Send where and size. We will put list next week in commentary. Our premise if you are not adding your just subtracting. email@example.com
The following is each and every reply to the challenge.
- 6,000 sows Missouri – in construction.
- 3,000 sows Minnesota – completed expansion from 1,500 to 3,000.
- There is a 1,600 sow expansion going on line the first of the year in Southwest Minnesota.
- 2500 sows – new construction stocked in July- North Central Missouri
- We just completed a 5,000 sow farrow to wean with the first round of gilts completing a 20 week cycle at thanksgiving.
- 2400 – Missouri
- I know of a new sow farm near Salem South Dakota under construction that will be 2,400 and a new one in Missouri populated summer 2020 and is also 2,400 head.
- A 32,000 sow operation is currently under construction on an additional 3,000 sow production facility in South East Nebraska, set to start in January 2021. Please keep my name anonymous.
Thank you for our readers that participated!
To summarize, our list from readers is 25,800 sows either stocked this summer-fall or under construction. We believe we could have some duplicates in the Missouri numbers so the total might be overestimated. There is also a good likelihood that we don’t have all new units just stocked or under construction.
The U.S. breeding inventory is around 6.3 million. 1% of that is 63,000. New sow herd construction of 26,000 is less than ½ of the 1% of the breeding herd.
How long does a sow herd facility last? 40 years? At 40 years we need to build 150,000 sow places annually to maintain herd spaces. We expect sow herd construction might be at as low a level currently in the U.S. than anytime in the last twenty years.
There was a run for a couple years of vet clinics-management companies finding outside investors to build new sow units. We believe that has come to an end or at least slow downed when early weans got to $5 a head for too long.
Our industry has been less than stellar for making profits the last while, so why would people have confidence to invest in new sow facilities. You need capital and courage to forge ahead.
We still see weekly sow slaughter running at levels above a year ago. The latest week about 8,000 over the last year average. Higher feed prices have increased break-evens in the U.S. and everywhere in the world. We expect continued year over year increased in sow slaughter numbers to continue.
The U.S. sow herd in our opinion continues to contract.
The ASF and Coronavirus issues are affecting the European Pig Prices.
Plants slowdown due to Coronavirus and the loss of Asian markets for Germany due to ASF is pushing German pork to other European countries.
On September 2, prior to ASF the Germany Slaughter Price was 1.47 Euro kg carcass (80₵ U.S. lb.), last week German slaughter price was 1.19 Euro kg. (64₵ U.S. lb.).
Other countries in Europe have seen a similar decline since the first of September in combination with higher feed prices.
The difficulties of the Euro slaughter market can be seen in Danish feeder pig prices. PRRS Positive 60 lb. feeder pigs averaged 436 Dkk the last 52 weeks ($70 U.S.), last week they were 144 Dkk ($22 U.S.).
We in North America have seen cheap feeder pigs. It will devastate the sow base. We expect liquidation in the European sow herd over coming months, as Coronavirus, German-Asia export market closure and higher feed prices lead producers to quit as the pig price goes below cost of production.
OPEN HOUSE – Canada
Last Friday we attended an Open House of Jem Farms- owned by Jesse Buis.
It’s a brand new farrow to finish sow unit in Ontario Canada that will be a Genesus F-1 multiplier to produce 20,000 F-1 pigs a year.
Jesse had been a Genesus commercial pig customer for a number of years when he decided to build a new farrow to finish facility. We appreciate the opportunity to work with him in Genetic production.
It’s great to see young independent producers with the capital and courage to invest in the future. For our industry to thrive we need the enthusiasm and energy of a new generation to carry the torch forward.
Pork is still the most consumed meat in the world. To maintain our leadership we need to continue to adapt to new technologies, whether it be housing, genetics, nutrition and health to expand and grow our market.
Congratulations to Jesse and his family for having the confidence to forge a future path forward with Genesus.
This post was written by Genesus