California and Other ThingsThis past week we went to Southern California on business, it was our first time there. Weather was good and certainly it’s an area that celebrates the automobile. Cars wall to wall! We live close to Detroit and could not help but think how the car pioneers in Detroit ended up so linked to the development and evolution of Southern California. Seems strange in some ways how the Southern California of green, hybrid, solar, windmills, etc… depends so much on the automobile but appears allergic to mass transit. Nothing of this has anything to do with the swine business. Other than 30 plus million people in California who raise next to no hogs and need their pork from the heartland of America.
Observations*Seems to be lots of stories coming to us about PRRS outbreaks in the Mid West. We usually discount disease stories as market movers but maybe levels of breaks might be greater than normal. PRRS occurring now, the timeline of production wacks hog supply in the summer of 2012. Already the lowest season of hog supply; less hogs always make higher prices. *We understand some of the sow barns that broke with PRRS had filters. Filters work but old fashioned bio – security is still necessary to keep PRRS out. *Genesus is currently running approximately 40,000 sow system PRRS, myco, and app negative. *As the President – CEO the health of a genetic system is paramount. We currently blood test for PRRS weekly or every time we select breeding stock. PRRS is a curse in the industry, how it can ravage producers financially is significant. We need to safeguard the chance of spreading PRRS. *Genesus and some other leading genetic companies are working with KSU, ISU and USDA in a consortium to study if there is a genetic component to PRRS. Naïve pigs to PRRS were inoculated with live PRRS strains and the results are being tracked and studied. Possibly there will be some findings come out of this research that will help us genetically select pigs more PRRS resistant. We hope so! *December is always challenging for hog prices to get traction. Too many days of holidays that Packers are closed to push packer demand. On the flip side weekly hog marketing’s usually start to decline seasonally. Last week the U.S. marketed 2.330 million hogs, 3.9% more than a year ago. Obviously not fewer hogs just yet. *Pork demand stays strong despite the 2.3 million hogs a week as lean hogs averaged $83.50 per pound on Friday. That’s about $40 per head higher than a year ago. A huge improvement and an absolute reflection of domestic and global pork demand.
*A few weeks ago we wrote about the Global Wealth Report from Credit – Suisse Bank. The report indicated that the world’s total sum of wealth is the highest in history despite the recession in North America and Europe. The wealth creation in other countries is enhancing demand for meat protein. This is pulling pork, creating demand, and leading to stronger hog prices. Confirmation of this is October pork exports posted their second largest monthly total ever, trailing only March’s all-time high. Demand, Demand, Demand.
Categorised in: Pork Commentary
This post was written by Genesus