Pork Commentary: USA-Canada Combined Inventory12 March 2013
US & CANADA - The combined USA- Canada Swine Inventory for the end of 2013 shows little change from a year ago, writes Jim Long.
|USA - Canada Swine Inventory (Thousands)|
|Kept for Breeding||7,712||7,022||7,025|
2012 versus 2011 shows little change. When we compare to 2007, 700,000 fewer sows and 2.5 million fewer hogs. Going forward it appears from this data the next while will be steady as it goes. Over the coming weeks we foresee at these expected supply levels lean hog prices will move towards a year ago prices.
|Canada Swine Inventory 1 January (Thousands)|
|Kept for Breeding||1,479||1,219||1,208|
Canada 2011-2012 shows little change in the breeding herd and market inventory. We will see what future holds. There was significant liquidation of sows over the last six months in Canada that we have firsthand knowledge of. We know of next to no expansion. We find these statistics confusing. Current statistics from USDA show about 10,000 a week fewer small pigs leaving Canada for the USA year to date. The latest week was 13,000 fewer. Canadian hog slaughter year to date down 2.6 per cent or about 12,000 fewer a week.
Less small pigs leaving Canada – fewer Canadian slaughter hogs. Doesn’t seem like the same amount to us, year over year. We still believe there was significant liquidation in Canada small pig movement to USA and Canadian slaughter numbers seem to back this up.
Last week in San Diego at the American Swine Veterinarian Association meeting there was a presentation by Darwin Kohler DVM and Chad Bierman PhD on the profitability of pig production.
Several traits contributing to the profitability of swine production are of interest to swine geneticists, including feed conversion growth rate, percent survival rate post weaning and non-productive days, litter size, pigs weaned/sow/year and piglet weaning weight. Many of these traits exhibit large variation. Consider the following data (Table 1). This data shows the top and bottom 10 per cent of closeouts on 30 million pigs. The attached values were calculated as: F/C at $3.50 per 0.1 unit, last weight at $0.70/cwt. And mortality at $1.50 per pig per 1 per cent death loss. The total loss value per hog is $50.70 between the top and bottom from these 3 traits.
|Table 1: Top & Bottom of closeouts of 30 million pigs|
|Wean-finish||Bottom 10%||Top 10%||Value|
|Entry Weight (lbs.)||11.30||14.80|
|Exit Weight w/o dead (lbs.)||249.50||278.50|
|Exit Weight with dead (lbs.)||234.80||269.80||$24.50|
|Average Daily Gain (lbs.)||1.39||1.66|
|Feed Conversion Rate||2.89||2.45||$15.40|
|Source: Metafarms closeout data AASU 2012|
"ADG may have a much higher value in a fixed time scenario. If ADG drops 0.1 pound per day in a 150 day wean to finish system, the final market weight will drop 15 pounds. A $.70 per cwt., this equates to a $10.50 per head reduction in revenue."
At Genesus we call the proceeding scenario Max Thru Put – Heavier weaning weights, rapid growth, and efficient feed utilization with full value hogs getting to maximum market weights. The economic value of Max Thru Put has been illustrated very well by Mr Kohler and Bierman in the data analysis of 30 million hogs wean to finish.
We are in an industry that last week Sterling Group indicates is losing $37 per head average farrow to finish. The analysis by Mr. Kohler and Bierman indicates $50.70 difference per head top 10 per cent versus bottom 10 per cent. Using the $37.00 average that could mean top 10 per cent losing $12.00 per head? Bottom 10 per cent losing $62 per head? The difference is huge. No one will survive losing $62 per head. The challenge is managing all factors (metrics) to maximize the results. Easy to say, harder to get done.
This is a tough business and not for the faint hearted. Darwinian Capitalism.
|Author: Jim Long, President & CEO, Genesus Genetics|
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