The USDA released its December 1st Hogs and Pigs last Friday. We were surprised by the numbers. Breeding Herd and Market numbers the same as a year ago?
- Maybe we are foolish but we don’t have real faith in the USDA report.
- The USDA report indicates the US Breeding herd expanded 29,000 from September 1st to December 1st. We don’t believe it, too many sows to slaughter, too few gilts purchased, too many producers de-popping.
- The Market Hog, the same year over year we will see? Few have been keeping Junk pigs alive for the last 6 months. The attrition of lack of financial resources due to these losses has cut drug use and cheapened feed rations. None of the above makes more hogs.
- Small pig imports from Canada are the same year over year which does nothing to increase market numbers year over year.
- Finally the USDAs estimate that chances are 2 out of 3 that the final estimate will not be above or below the current estimate of 66.3 Million head by more than 1.3 percent (One million head). Chances are 9 out 10 that the difference won’t exceed 2.3 per cent (1.6 million head)
- We expect both the December 1st breeding herd and market inventory is smaller than USDA stated.
- US Pork Exports are at record pace and we suspect this will continue as the Global demand for pork and other meats increases. The latest monthly US Pork export number (October) was best month in history $600 million and 217,080 metric tonnes supposing previous record set in November 2011
“Examine perceptively, the world is in better long term economic condition that it has ever been. The developing countries appear to have overtaken the G7 (US, Japan, Germany, France, UK, Italy and Canada), in combined output in 2009 and are pulling steadily ahead, with a growth about three times as fast. During the last 30 years, over 700 million people, 10% of the world’s population have been pulled upwards out of poverty by growth in developing countries. China is a well-publicized leader of this group, but India, Brazil and Indonesia are among the largest participants”700 Million more consumers, many desiring pork with their numbers ever increasing. The Global demand for Pork will continue and strong export demand should be no surprise.
- Also price supportive for Hogs is the drop in Beef production over the coming months. Less Beef = Stronger hog prices.
- Maybe we are too out there but we see significantly stronger hog prices in 2013 than 2012 with summer highs hitting $1.10 lean.
Swine GeneticsWe are in the Swine Genetic business. It is quite competitive, reflecting the pressures of a commodity business. Maybe some industries have collusion but be rest assured in Swine genetics it is close to mortal combat daily. No competitors are friends. With the pressure of competition, it is the ongoing challenge of genetic improvement and cost control. Recently we observed this reality. A genetic competitor decided to select a multiplier on a site which has had at least two active health breaks, poor set back distance, lack of willingness of regular health checks or quality control. While at the same time compromising genetic improvement by having a closed herd. Agreeing to compromises in health and genetics quality might be short term beneficial for the genetic company. Long term health risk sites and lack of genetic progress not only increases the disease chances of the customer but also limits their production results. Compromising health and genetic advancement has been and will be the failure for quick buck genetic companies. Being a hog producer is tough enough, you don’t need your genetic supplier to make it tougher.
Questions to Ask Your Genetic Company
- What is your Health? – Vet to Vet –
- Who are your Geneticists?
- What is your Genetic Program? What are your breeds?
- What is the size of your Nucleus? Name the farms and herd sizes – Where are they?
- Are the Purebreds really Purebreds? Are they Registered Officially?
- Are they really true F-1 gilts or just an alleged F-1 for marketing reasons?
- Show me commercial results.
Categorised in: Pork Commentary
This post was written by Genesus