Pork Commentary: Manitoba Hog Days!11 December 2012
CANADA - This past week we attended Manitoba Hog Days, the annual conference and exhibition for Manitoba’s swine industry. Hog Day’s was held at the convention centre in Winnipeg this year, writes Jim Long.
- The last Manitoba census of swine inventory was on 1 July – It was 316,000 sows and 2,573 million market hogs. Manitoba has about one quarter of all the sows in Canada.
- We expect that due to the high feed prices and low small pig prices that Manitoba has liquidated or is in the process of liquidating 25,000 plus sows. Most if not all of the herd liquidation in Manitoba is by producers of early weans and feeder pigs.
- Last week at Manitoba Hog Days there was many a feeder pig broker scouring for pigs. All we talked to had the same mantra, “Looking for pigs”. It doesn’t take a rocket scientist or ag-economist to figure out the reason USDA’s average cash early wean price last week was $58.79 a pig with highs just under $70. Pigs are scarce relative to demand.
- Manitoba farrow to finish producers who grow their own grain have weathered the negative margins much better. Crop yields were generally good. This has given them staying power as their own feed is fed creating a decent whole farm income. Little of the liquidation in Manitoba is in this sector of the industry.
- Puratone Corp in Manitoba (26, 000 sows) had gotten into financial difficulty and was recently sold for just over $40 million to Maple Leaf Foods, far under Puratone’s debt of nearly $90 million. A big haircut for debtors, smart move by Maple Leaf, as they garner hog supply at a discount with rising hog inventory values coming. A good sign for all Manitoba’s producers as Maple Leaf’s purchase of Puratone indicates Maple Leaf’s commitment to maximize throughput at Canada’s largest hog plant which they own in Brandon Manitoba. Maple Leaf is now Canada’s largest hog producer with approximately 60,000 sows.
- In Manitoba there is a moratorium on new hog barn expansion, due to environmental concern. It’s been in place for about four years. It is strangling the industry as infrastructure deteriorates and ages, there is no means of replacement. Industry leaders have been working tirelessly to get opportunities for barn constructions. The industry has also been proactive and has cooperated financially with the Canadian Government and University of Manitoba to build and develop the National Centre of Livestock and Environment. The newest swine research centre in the world is focusing on new environmental solutions for hog production and other research. All research is done with Genesus Genetics.
- In general the mood of customers and others we talked to was positive. Many of our genetic customers are farrow to finish and grow their own feed. They see 2013 coming to be a good year. There will be no expansion in this market; it will be a holding pattern after the current liquidation.
There is a saying that “Strengths are our weakness”. In the context of the swine industry the natural optimism of swine producers keep us all going in bad times. “We know it’s going to get better.” The flip side of the optimism is we keep going with relatively little herd liquidation in the context of the financial losses many have incurred. This in itself helps keep margins low. That being said, we find it fulfilling every day to meet and work with optimistic pork producers striving to improve. We are a resilient group. If we ever went to war, we’d want to be in a platoon of pig producers. There is no group that would fight longer and be harder to kill that than the Pig Platoon. Survival despite the odds is in the genes of hog producers.
|Author: Jim Long, President & CEO, Genesus Genetics|
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