Jim Long, President and CEO Genesus Genetics
Euro Tier Report
Last week we attended the Euro tier Trade show in Hanover Germany:
Euro tier is a massive livestock and poultry exposition that is far larger than any other event we have ever attended.
Thousands of European and Asian visitors were present. There were very few people from North or South America. Genesus was the only North American derived swine genetic company present.
- The European swine industry is in general not currently profitable. Depending on which country, profits are on either side of the breakeven.
- The feed grain price has increased in Europe partially due to lower crop yields.
- We get little sense that there is much if any European expansion in the swine sector.
- At Euro tier we were amazed at how many swine equipment manufacturers were there. The options for buyers are numerous.
- There was a sense of back to the future with numerous equipment options for what some would call animal welfare. Farrowing, pens, numerous options for loose sow housing, straw spreading machines, lots of different toys for pig pens etc. Rules on housing, space allocation, castration, tail docking are just some of the factors that continue to drive up the European cost of production.
- There were lots of Chinese visitors with many of the largest swine production companies visiting, Talking to them you get a real sense that the affect ASF will have on China long term is yet to be determined.
While at Euro tier, Sichuan the last large hog producing Chinese province (60 million head a year) that had been negative got its first ASF case. The question is, now that basically all provinces with pigs have ASF how will that affect inter provincial trade that has been extremely restricted for that last few weeks. This restriction has created market differences of over $100 U.S. per head between provinces mostly depending on hog supply relative to packer capacity within a province.
A week ago in our commentary we asked the question “Why should African Swine Fever be a reportable disease?”
- No.1 it is not a human health risk.
- No.2 the major economic risk for many countries is the resulting depressed prices due to border closures and stopping of export sales.
- Veterinarians think it should remain a reportable disease. People who own pigs don’t think so. We talked to producers from Germany, Spain, China, Denmark and England, who commented to us on our position.
- Point is the economic damage from border closing is much greater than the disease itself. People who own pigs agreed.
- Now can anything be done? If no will or effort there is never any results.
It was interesting to us because we are in swine genetic business, to see the big change in Danish Swine Genetic Industry. Two years ago at Euro tier Denmark had one genetic company Dan Avi (Danbred). This year after a major fracture there is three Danish companies, Danbred, Danish Genetics and Møllevang (PIC).
Close to half of the former Dan Avi (Danbred) genetic producers have left to sell as Danish Genetics and Møllevang.
The direction of the genetic base is obvious:
- Where once genetic program, all resources have been divided into three parts.
- Danish Genetics has decided that their Danish Genetic program will operate by the Roslin Institute in Scotland. Is it now Danish-Scottish?
- For the moment the Dan-Avi fracture will give producers in Europe very similar product from different selling group.
Euro tier is interesting with many countries and languages present. Over the last couple years Genesus has established genetic sources in Great Britain, Germany, Iceland, Spain, Russia and France. With that is the need for us to learn to go into business in multiple languages. It’s a challenge but part of being the only North American owned Global Genetic Company.
At Euro Tier the three owners of Genesus were present as we worked together with twenty Genesus country representatives to grow our business one customer at a time.
“We’re here to put a dent in the universe.
Otherwise why else even be here?” – Steve Jobs