Jim Long Pork Commentary, African Swine Fever – Our Observations, January 7th 2019

1145

Jim Long, President and CEO Genesus Genetics

Not a veterinarian – What you are about to read are some observations from what we have observed.

Russia got African Swine Fever (ASF) in the mid 2000s. It’s been dealing with it for over ten years. It is still there, there are still breaks, and it hangs over the industry. We have been doing business in Russia since 2006 so many of these are first hand observations.

Most Russian commercial farms have set-ups for bio security that are at levels that surpass most of the world. These include:

  • Usually double fenced facilities.
  • Controlled gate entry.
  • Fulltime 24 hour per day security guards.
  • Some double showers- shower then shower again before entry to barns.
  • Minimum 2 night’s downtimes for barns.
  • No food brought to farm by employees. Food prepared by company- no pork served.
  • Almost all feed is bulk and pelleted from own feed mills.
  • Tire rinse facilities at entry to farm site.
  • Large land base which has farms not real close to each other.
  • Many hogs slaughtered at their own facilities.
  • Virtually no small pig commerce- industry 99% farrow to finish complete ownership.
  • All commercial pigs raised in indoor confinement.

Despite all these protocols and efforts there are still African Swine Fever breaks in Russia. You can minimize it but so far it has been impossible to eliminate

In Russia we observe:

 

ASF has led to consolidation of swine industry. Larger operations with multiple farms have been able to assume risk of a break. Banks are weary of one owner operations and their ability to withstand all herd killed and a minimum of 6 month barn being empty before repopulation.

There has been much talk of Russia becoming self-sufficient in Pork. Sometimes not sure what that means, but we observe the expansion of Russia’s industry despite profits of over $50 per head average for the last few years has been slowed by ASF and its risk.

In Ukraine for example, which got ASF recently saw 15-20% of its herd decreased due to ASF and economic implications of the disease which include; bankers, disease itself and surge of pigs on market.

In Russia many new rules regarding bio-security and food safety have squeezed small producers and in some areas they have been eliminated. This also has favored consolidation.

The actual dead pigs from ASF in Russia over the last ten years we estimate at 2-3 million. In same time probably 20-30 million pigs died from Prrs throughout Russia. The main threat of ASF is all the implications of it due to its status as a reportable disease and all the crap that comes with that.

ASF in China

In our opinion the structure of China’s industry will make ASF very hard to eliminate.
Some reasons:

  • Over 7,000 slaughter plants.
  • A large amount of industry uses bagged feed and reuses bags.
  • The trade of pigs- 10’s of millions of small pigs sold and moved about
  • Lack of truck-trailer washing
  • Over 7 million sows in backyard and outside production. We expect rules etc. will decrease these operations rapidly.
  • Mobility of people and with that the pork they eat that can carry ASF- Cars, freeways, fast trains, airplanes etc. Overall people movement.

Chinese Government compensation of $170 per head for ASF should be enough. This past week Chinese Government announced it will be a criminal offense for illegal activity relating to ASF.

With over 400 million pigs in inventory the implications of ASF in China are not known for sure yet. We expect slaughter levels will stay up as we believe there is liquidation ongoing. The key is to follow China’s hog market price. It will be an indication of supply. So far it’s held strongly around 14 RMB/kg – (92₵ U.S./lb.) live weight. The market price always finds its place over time.

Congratulations to the
Herring Family and Hog Slat Inc.

for 50 years in Business

Hog Slat has been a leading and integral part of the development of the Unites States Swine Industry. They successfully captured the essence of scale and common sense production: in buildings and swine equipment.

Hog Slat evolved as the industry has and have now pushed the American model of Swine Production to markets throughout the world.

We congratulate the Herring family and the rest of the team at Hog Slat for taking a family farm that began to make concrete hog slats to a Global Powerhouse in the Swine Industry.

View message online

Jim Long Pork Commentary

www.genesus.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here