USA Market Report
Allan Bentley, USA Sales
Cash hogs and futures have held up remarkably well in the face of some of the largest weekly slaughters in history.
Weights for the last week of 2016 were 4 lbs. below last year. That tells me the industry did a great job chewing through the hogs in a timely fashion and pulled hogs forward so as not to get too backed up during the holidays.
Of course, as Jim Long likes to remind us, when Packers are making $50 per head they have quite an incentive to kill as many as they can.
We have not only held steady prices, but both cash hogs and hog futures have increased in value. Cash hogs have gained $9.00/ cwt in the last 6 weeks. February futures have gained about $12.00 in that same period. That means the basis is a little wider than history says it should be. It is never wise to go against a strong uptrend, especially when dealing with record supply. Cash hogs will catch up to February futures. Packers have plenty of margin to actively bid against each other.
Someone asked me if we could be setting some counter seasonal highs in the futures? After cash and futures have performed so well with record supply, the past 6 weeks, I see no indicators that will happen.
As supply drifts lower and demand remains at these levels, we should rally cash and futures into May. As many have said, and I will repeat, the difference in what the producer is getting paid for his hogs and what the cut out value is, will not stay this wide for an extended period of time.
I talk a lot about basis in the cash to futures price. There are times it is inverted and times that basis is way too wide, neither stays that way for long. The same can be said for the cut out value to cash hog prices. We are at record wide levels and that also will more than likely change soon.
Canadian pigs making their way into the European market
By: Kees van Dooren, Pig Progress
Genesus breeding material has become available for almost the whole of Europe exclusively through the Danish company Porc-Ex Breeding.
Only in Germany and Spain Porc-Ex is not a distributor; nevertheless sales of Genesus genetics can happen in these countries. Porc-Ex is also distributor for Ukraine and Belarus. Speaking to Boerderij, a sister title to Pig Progress, Porc Ex-Breeding director Holger Bøgebjerg Sørensen stated that he is happy with having become the distributor. As the result of a reorganisation of the sales structure of Danish DanAvl, all that would’ve been left for Porc-Ex would be sales agent. For that reason, he has started offering the Canadian genetics line.
Are Canadian genetics already available to European pig producers?
Bøgebjerg Sørensen: “Most certainly. At Yxia, the French cooperative AI organisation, there are already 25 boars, Landrace and Yorkshire for sow breeding purposes and Duroc terminal sires. Semen production started late last year. I expect that a 2nd shipment of 25 boars will be travelling from Canada to France in early 2017. These boars will be free from Actinobacillus pleuropneumoniae (App), Porcine Reproductive and Respiratory Syndrome (PRRS) and mycoplasma. Pig producers can therefore also replace their own sows using Genesus pigs.”
Will you also start breeding F1 sows?
“Sure, we aim to start selling Genesus F1 sows early 2017. We do consider starting a sub-breeding farm in Denmark.”
What is the added value of Genesus pigs?
“In comparison to Danish sows the birth weight is higher; piglets under 800g are rare. This leads to a lower piglet mortality. Piglet mortality is an important social theme which the industry cannot ignore. I think DanAvl continues to focus on litter size without taking the ethical side into account.
“In addition, the gestation time of the Canadian sow is 2-3 days shorter than the Danish DanAvl sows. The advantage is that the lactation period takes longer and that the need for nurse sows is reduced. Nurse sows usually make it difficult to work with a more week system.”
“Meat quality of the boars is also fine. Without a doubt, the Duroc terminal sire has proved that at global pork markets all over the world.”
Holger Bøgebjerg Sørensen, director of Porc-Ex Breeding, Denmark.
The number of piglets per litter must be lower then?
“True. The piglets of the Canadian sows, however, are more vital and mortality is lower. The sows’ good milk quality have added to significantly higher weaning weights. We have observed this at pig farms all over the globe, including Russia. In that country there are various large farms using these genetics.”
It doesn’t sound like an easy job – obtaining market share in a shrinking market.
“I agree. Nevertheless, I am convinced that it is possible to acquire that share on the European market for pig genetics, having a good product and knowledge of the local market and culture. To be a local partner, we cooperate with daughter companies in various countries. From Canada we receive a lot of support to acquire this position on the European market. In addition, aftersales is well arranged at Genesus. On top, we have experience with finding new markets, that is what we did before with Danish sows.”
What market share for sows is your aim?
“I couldn’t tell you. It’s just too early to say anything about that. We have just begun with Genesus pigs in Europe.”
Almost 1 million piglets for export
The Danish company Porc-Ex consists of 2 parts. Porc-Ex Breeding is the section selling pig genetics, with subsidiaries in various European countries. In addition, there is just plain Porc-Ex, which is a trading business focused on exporting piglets from Denmark. In 2016, the company exported almost 1 million piglets. Most important destinations are Poland, Germany and Italy.