Pork Commentary

Jim Long President – CEO Genesus Inc.

August 12, 2013

 Road Trip – Austria

This past week we were in Austria.  A country of a little over 8 million people who have the distinction if not the honour to consume 50 kgs or about 119 lbs. of pork per capita per year.  That’s 2.5 times what is eaten in North America, people looked healthy and happy, is there a magical reason. Austria is German speaking.  They quickly pointed this out so that we weren’t confused that Austria is not Australia, so don’t be looking for Kangaroos.  We didn’t see any either. The swine industry of Austria is about 300,000 sows.  There is little consolidation with most farms in the 100 sow range.  We toured one farm that was 2,500 sows and were told its one of the largest in the country.  Of note, where the pigs are is where the corn is grown.  The hilly Styria region has corn and pigs everywhere.  No chickens.  No cattle.  Corn and Pigs.  The Corn crop didn’t look great as they are suffering from lack of rain and high temperatures.  It was deja vu 2012. Austria has been pushed to new EU Animal welfare laws.  Sows after breeding must have the ability to have free movement.  It would be good for the idiots from the Humane Society of the United States (HSUS) to go into a free access stall barn.  The barn we were in, the sows were lying in the gestation crates (Individual maternity pens) this was by free choice, the open area behind was just that open, the sows preferred the stalls to lying in the open.  Kind of funny if it wasn’t so sad that the social engineering from the lawyers at HSUS weren’t so hell bent that we all become vegetarians.  That in itself defies all of mankind’s history. Price of corn in Austria was about $7.00 a bushel (about $300 a tonne), 30 kg feeder pigs were bringing 82 euros or about $110.00.  A feeder pig producer told us the current profit was over 20 euros (25+) per feeder pig.  He was happy, Market hogs 1.7-1.8 euros per kg which worked out to about $230 for a market hog.  They told us many smaller producers have quit in the last year due to two new animal welfare regulations combined with higher feed costs.  Producers lost money for several months.  Expectations is despite the drought, feed prices will drop significantly at harvest.  When we were in Austria and our hosts took us to a castle that bears the name of my mother’s family.  Somehow we had missed out on the noble birth thing before.  My mother’s family had to come to America because they were poor.  It was more like a “Toyota Corolla” of castles. Near where the castle was, it was not far from where the Christian armies in the 14th century finally defeated the Islamic Armies of Turks that had been trying to conquer Europe and turn Europe Islamic.  Soon after that victory, the Christian armies drove the Islamic Turks back from the rest of Europe.  One of our hosts told us (tongue in cheek) that Austria has been eating pork in defiance and celebration ever since 110 lbs. per capita some celebrations. Austria producers told us their market is mature they don’t expect expansion.  Government regulation in animal welfare, environmental, labour challenges, feed costs and the difficulty to get building permits (up to three years) will keep a lid on expansion.  On top of this is pigs are concentrated in a small area, PRRS, Mycoplasma and other health issues are typical.  Health is constraining productivity. Some producers told us they expect new hog production might be started in the bordering country of Croatia, now since January 1st official member of the EU.  Croatia has land, feed, labour and increasing pork demand.  Their Government is supportive of pig production. We were in Austria on Genesus business.  After seeing the quality of breeding stock that the European multinational countries have been shoving on them, we became more encouraged that there is a market for us.  The short fat pigs from Holland and the frail from Denmark.  Thank God for the competition. This coming week we will be in the Ukraine and then Russia.  We will report our observations.

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