Pork Commentary

Jim Long President – CEO Genesus Inc.

 March 25, 2013

Alberta Pork Congress

This past week we were at the Alberta Pork Congress held in Red Deer.

Our Observations

• Alberta Pork Congress was well organized and well attended especially when considering an industry the size of 140,000 sows.
• Weather was bad on the Thursday. A 100 car pile-up on the main highway happened during a snow storm not that far from Red Deer. Several people were injured.
• Alberta Congress like many other pork events had fewer exhibitors year over year. Fewer people selling to fewer producers. Selling to people with little optimism and hurting for money is cutting suppliers.
• A couple weeks ago Statistics Canada released the breeding inventory for Alberta. It indicated that last year on July 1st it was 140.2 thousand while on January 1st this year it was 140.1 thousand. No change. In many conversations with producers and industry participants, there was not one person who did not believe there had been breeding herd liquidation in that six month time frame in Alberta.
• An industry service provider told us that he had personally had 11 independent sow unit customers begin liquidation over the last three months in Alberta.
• Producers told us repeatedly they were worried about the future. All the usual suspect issues, lack of profit, high feed costs, labour issues, export market concern etc. Like many areas producers think it must be easier to produce hogs somewhere else. Surprise, surprise, we don’t see much difference anywhere in North America. Some advantages in some areas but there are trade-offs. Iowa has higher hog prices but significantly more disease challenges than some other areas.
• Many Alberta producers grow their own feed, but it is interesting that even these producers are looking for lower grain prices to help there hog operations show profitability. Like everywhere Alberta hog producers are hoping for a huge US corn and soybean crop to help moderate feed prices.
• Lots of discussion on Paylean. Producers are asking if it will not be used in the future due to marketing issues in the export markets. Some packing plants in Western Canada have gone Paylean free.
• On a personal note it was great to visit with many Genesus customers. Always there are issues but production of our customers are excellent. One full program Genesus customer Duroc terminal X York-Landrace females brought their production data.

Gadsby Colony North

Fantastic results. When you put your heart and soul as an organisation into making the best pig genetics in the world it’s great to see the combination of management, feed, health and genetics come together. Having big pig numbers matter but they must get to market. Last year Gadsby North had over 8,000 lbs. of liveweight per sow get to market the 4 ton sow. The limits of biological performance continues to move forward.

Summary

Our week in Alberta reinforced our belief that there has been net breeding herd liquidation that for whatever reason has been missed by both Canada and US Government statisticians. We are maybe crazy but something has happened. The industry losses pushing to $40 per head is real and the pain is real. It’s driving people out of business. There will be fewer hogs. The past week we talked to a large producers who liquidated last summer. Its last hogs go to market in May. We expect May-June could behave a big market surprise.

Categorised in: Pork Commentary

This post was written by Genesus