Jim Long, President-CEO Genesus Inc.
March 6, 2017
European Swine Inventory
Last week, Eurostat released inventories of the breeding herd and pigs in inventory in the 28 countries in the European Union.
The latest E.U. census shows a fall of the EU pig population of 1.0% to 147.3 million and a drop of 1.6% of the sow herd. Spain has 3% more pigs. Among the countries with the largest gain were Poland, with an increase of 4.9%, and Ireland, with an increase of 3.6%. Hungary had a surprising fall in numbers, down 7.6%, with Slovakia also down 7.3% and the Czech Republic with 4.9% fewer pigs. There was also sizable reductions of the pig populations in France, Denmark, and the Netherlands (Source: European Commission).
European Union – December 2016
(1,000 head) Breeding herd
As you can see by the data of the major countries in Europe, every country had fewer sow numbers in 2016 than 2007. Some down quite dramatically. Poland about half. Germany down 500,000 sows. Italy and Spain down 200,000 sows each. Belgium lower 150,000. Hungary, Serbia, Romania about 100,000 each. Productivity increases is the major factor as total tonnage of pork produced has remained about the same. The increase in productivity can be seen in some sample countries on their total pig population relative to their breeding herds, from 2007 to 2016.
Total Pig Population
The European 28 countries have about double the pig production of the United States. In the last two years, the EU has captured almost all the increased China market. The EU has been aggressive, and with no paylean in their system, were able to get China market access quickly.
- The US hog market has lost some steam. Lean hog prices and pork cut-outs have dropped about $0.04/lb. This was after a $0.25 increase in lean hog prices in a matter of weeks, which increased prices $50 per head. We expect prices will rebound and still expect US lean hog prices to be in the 80’s this late spring/summer.
- Last week, we reported that Topigs-Norsvin had a financial loss of $6.91 million USD in their last fiscal year. We weren’t sure if it was true so we had confirmed with Topigs-Norsvin executives. We want to reiterate to the Topigs-Norsvin customers who contacted us that indeed it is true. Best they ask Topigs-Norsvin people to explain how they lost so much money while PIC was making several millions. It’s beyond us how to explain such a financial loss in an industry that is making money. Bottom Line: Ask Topigs-Norsvin to explain the $6.91 million USD loss, not us.
- We understand from quite reliable sources that one of Icon purebred swine breeders of the US industry has made arrangements on ownership with a Chinese company. We expect an official announcement soon. Last week, it was Hermitage and PIC. The consolidation of the swine breeding stock industry continues. The cost of Genomics is sorting who can stay competitive.
This post was written by Genesus