Pork Commentary: Great Britain – Spain Road Trip10 March 2015
GLOBAL - This past week we travelled to Great Britain and Spain, writes Jim Long President – CEO Genesus Inc.
In Great Britain, the Commercial Swine Industry is operating at breakeven levels after several months of good profits.
With about 400,000 sows, Great Britain has lost about half of its production over the last decade as animal welfare rules have made cost of production significantly higher than in the rest of Europe.
Production in Great Britain is uniquely relative to anywhere else we have travelled. There are two production models. One adapted commercial and the other outdoor.
Commercial is production in buildings with pens gestation, straw, farrowing crates, nurseries, and finishing much on straw. Some buildings are more like sheds with high profile, all natural ventilation and elevated walkways in the middle of the barn to throw down straw. A 600 sow farrow to finish would have around 10 people as the system and is relatively labor intensive. Gestation crates are not allowed.
In both commercial and outdoor production, pork retailers dictate much of the rules in an attempt to develop a unique brand. This can include housing type, organic, genetic specific, and antibiotic restrictive.
The outdoor production (40% of total supply) is like the USA 25 years ago, with outside huts for sow farrowing. For us, it was like a time warp with sows in the mud and little pigs running around. Tough way to raise pigs but retailer initiative are providing a premium to produce outdoor pork. From what we understand, the lower productivity and higher feed conversions due to the outside environment erodes the pork premiums.
Market necessity is the mother of invention but this type of production makes Great Britain uncompetitive to most of the world. Let’s hope the rest of the world can resist this direction in production.
Great Britain is fortunate to have excellent swine stockmen. Well trained, knowledgeable, and pig lovers. This in itself keeps the industry viable. The farmers that have survived the many rules and production restrictions are resolute and determined. A hardy bunch with a passion for pigs.
Spain much like Great Britain is currently around breakeven in hog production. Lower costs than Great Britain but also lower hog prices. Spain is the fourth largest swine producer in the world, after China, USA, and Germany.
Spain in the last inventory had 2.36 million sows, an increase of about 100,000 from a year before.
Spain is almost six times larger in pig production than Great Britain. The Spanish Industry is dynamic and looking for long term competitiveness. It benefits from a strong domestic demand for pork as its population of 45 million consumes 50 kg (100+ pounds) of pork per year. We found it quite interesting that the meat shops in Madrid that had numerous hams for sale ranging in price up to 82 Euros a kilo ($45 US/pound). Some hams aged up to 3 years, a product of Iberian pigs. At these stores slices of ham could be purchased and consumed on site with beer, wine, etc.
We were in downtown Madrid Saturday night and each of these premises were full of people eating ham. It’s a cultural experience we have never seen. In America ham is almost the cheapest cut, while in Spain, the most expensive. The premium Iberian program includes Duroc up to 50% of its market hog make up. The Iberian program makes up only 8% of Spain’s 2.3 million sows.
Spain like many other areas of the world is beginning to wonder why they use a Pietrain derived male line in commercial production. There is increasing use of Duroc boars with many coming from Genesus as the meat quality, marbling and flavor considerations will make a better tasting pork product with the added benefit of market hogs that grow quicker and have better robustness.
Great Britain and Spain – an interesting week. It’s a big world. Pork is the number one meat consumed globally. Farmers everywhere react to their circumstances and market dictates. Darwin Capitalism – Evolve or die.
|Author: Jim Long, President & CEO, Genesus Genetics|
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