Jim Long Pork Commentary, Euro Tier, November 6th 2018

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Jim Long, President and CEO Genesus Genetics

In a week the massive Euro tier Livestock and Poultry Exhibition will be held in Hannover Germany. An event that is held every two years. We will be there at the Genesus Exhibition with 23 Other Genesus Associates as we continue to grow in Europe and Asia. 4 years ago at Eurotier there were 4 of us in the Genesus Exhibit.

Reminds us of the quote by Henry Ford: “If everyone is moving forward together, then success takes care of itself.”

This week in honor of Eurotier we thought a synopsis on the E.U. swine industry might be relevant.

Most of the data to follow comes from a report published October 18, 2018 by the Committee for the Common Organization of the Agriculture Markets, European Union (E.U.).

After China the European Union is the second largest swine producer in the world. Just about double U.S. Production. Some E.U. countries have no data available.

The inventory numbers indicate to us that the industry has been stable over the last three years with both total pigs and breeding sow numbers staying relatively constant.

One indicator of market trouble is the collapse of feeder pig prices now at 33 Euro per head, ($38 U.S.) 23% lower than a year ago. This reflects more supply than demand, and is putting large financial pressure on two major feeder pig producers. Denmark and Netherlands.

Feeder pig prices seen to be challenged by higher feed costs. The average hog price in E.U. is around 1.45 Euro’s kilogram (75₵ U.S. live weight a lb)

A good price for America but not great for E.U. producers.

When we look at individual countries we see that Spain has by far the largest sow herd and total inventory. Over the last ten years Spain has had dynamic growth as the integrator model they employ has worked very well relative to independent producer model of Northern Europe.

The E.U. exports more pork than any other area.

Year to date Jan-Aug Export market, total 2,564,438 tonnes.

Over a third of E.U.’s exports go to China. Jan-Aug: 801,191 metric tonnes. China is a big market for E.U. and have done a much better job capturing the market compared to the Unites States.

The Market capture has been done despite weekly hog prices significantly higher.

Obviously E.U. hog prices are higher, but we don’t sell market hogs into Export markets. We sell pork. We don’t have all the correct data but we expect if we had the wholesale pork cut-outs prices the difference would be much narrower due to the fact that the U.S. packer gross margins have been historically high over the last three years. E.U. packer margins haven’t been as good. Consequently, the pork prices between countries in much narrower than hog prices would indicate.

China

Last week we wrote about ASF in China, we got the below reply from a foreign person based in China. We quote:

“Classical swine fever not African swine fever remains the big dog in China, along with much pseudorabies and a very cavalier attitude about PRRS predominating.”

“Of course ASFV gets the news as it should.   No one wants to discuss CSF much in public or admit that the beloved c-strain vaccine for CSF has created a disaster.  The new subunit vaccine for CSF is quite promising however.  The upcoming rush to vaccinate for ASF is a dark cloud on the horizon.”

“Certainly the price difference is sending pigs and pork through the porous provincial borders all night.”

“Hopefully ASF may cause some changes in biosecurity but mythology and superstition still reign and the last thing they want to try is cleaning dirty trucks.”

Genesus Welcomes
Everestus Akanno, PhD

Genesus is very pleased to announce the appointment of Dr. Everestus Akanno, PhD to the position of Geneticist.

Since receiving his PhD in 2012, Everestus has worked at Livestock Gentec, University of Alberta as a postdoctoral fellow and most recently as a research associate. Everestus has been actively engaged in several R&D projects focusing on genetic and genomic approaches to improving economically important traits in beef and pork production.

He has worked collaboratively with industry groups in the conduct of industry-driven R&D projects. In his new role, Everestus will be responsible for the Genesus genomic evaluation system and will develop and conduct R&D projects focused on increasing pig genetic improvement through incorporation of genomic technologies. As a member of the Genesus genetic program team he will collaborate with other team members and university personnel on R&D projects and technical services.

“We look forward to Everestus’s contributions to our programs. His skill set, experience, and desire to be involved in the pork industry make him an excellent choice for this position. Our genetic improvement and R&D programs continue to expand and finding the right people to support and move these programs forward is a key to the future of Genesus” says Dr. Bob Kemp, VP of Genetic Programs and R&D.

Everestus holds a PhD degree from the Centre of Genetic Improvement of Livestock at the University of Guelph. He has published over 20 articles in peer-reviewed scientific journals. Everestus resides in Edmonton, Alberta with his wife and three children.

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