- news, features, articles and disease information for the swine industry


Pork Commentary: When is it Going to be Good?

14 November 2012
Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.

CANADA - We write as we travel to Germany to attend Euro Tier. In flight and away from phones, emails, etc… It allows us to think macro not micro about our industry. We ponder the question “When is the pig industry going to be good again?” It is the billion dollar question, writes Jim Long.

As we reflect it seems there has been no golden time of pig production in North America for the last decade. We have had micro moments of excellent profitability but they don’t last. Our industry seems to be on a roller coaster of profits then losses. Over the last five years the balance of profit and loss has been one of trading dollars, there has been a war of attrition with producers living off their equity and wits with many succumbing to the economic reality and quitting. Consolidation continues as producers quit or fail. In the last year Maschoffs takes over Nebraska Pork Partners, and Maple Leaf Foods taking over Puratone Corp. There will be more consolidation in all aspects of our industry: producers, feed companies, packers, drug companies, genetic companies, etc… Consolidation will continue. Size and scope of all parts of our business continues to get bigger. It appears linking with larger buying groups, marketing groups; corporations are a sign of the times.

A dilemma we see in our industry is what we would characterize are government producers that seem to handicap our profitability. US Government corn ethanol policies have cost the swine industry billions of dollars in increased cost. There is no legitimate argument in our opinion how 5 billion bushels annually of US corn being mandated into Ethanol has not cost our industry dearly. Corn Ethanol is not only a poorly devised program but in itself is destroying U.S. and Canada’s Global pork production competitiveness. It is sad and we suspect after the recent US elections little change in the corn ethanol policy.

So where is the silver lining? The only best hope, pork supply drops to a level that hog prices rocket higher and feed prices become next to irrelevant. We have been aggressive since the first part of July that US hog prices will be the highest in history the summer of 2013. Hog to corn ratios of 8 – 10 to 1 will always lead to liquidation – always have always will. We believe the North American breeding herd is getting smaller each and every day. In the coal mining industry they place canaries in the mines to warn of dangerous gases. In the swine industry we believe cash small pig sale prices are our canaries. In mid - September early wean pigs were $8.00 per head. They had next to no value. Last week the USDA reported cash early weans averaged $47.58 that is a change of $40 per head in eight weeks. In mid – September when early weans were $8 anyone who said they would gain $40 in eight weeks would have been sent for psychological analysis. The early wean canaries are telling us liquidation of sows has been real. Last week USDA reported small pig sales were about 70,000 last year the same week about 140,000 small pigs that is a big difference. Liquidation has happened and is happening. There is no logical reason producers will pay $47.58 per pig, it doesn’t pencil to a profit. Markets are not necessarily ever rationale. Finishing barns are empty, producers can’t stand empty barns, they cost money to sit empty. Big reason small pigs are going higher. There will be lots of empty finishing in the months ahead as pig supply drops further.


When is it going to be good? Last July we predicted the highest prices ever next summer July, we still believe it will happen. Last week we met with a commodity trader, he believes corn will be $4.50 a bushel by February – March. Why? Brazil will have a huge crop, less corn exports, less ethanol use, and less livestock – poultry use. The US by Feb – March will be expecting to plant a huge crop. Let’s play the scenario: $4.50 corn - $1.00 lean hogs for true big profits and it will be our turn in “high cotton”.

This week in Hannover Germany is Euro Tier. We will report our observations next week.

Quote: "Pessimists are usually right and optimists are usually wrong but all the great things have been accomplished by optimists." Thomas Friedman

Author: Jim Long, President & CEO, Genesus Genetics

To find out more about Genesus Genetics,
please take the time to visit their website at

The opinions expressed in this commentary are entirely those of the author and can not taken to represent the views of, its owners or its management.

Share This

News By

Related News

Mexico Pork Market

News from Mexico  21 October 2016

China Hog Market Report

News from China  13 October 2016

More News

Our Sponsors


Seasonal Picks

The Commuter Pig Keeper - 5m Books