According to Jim Long, 900,000 fewer market hogs in inventory is a huge decline. Canadian market hogs will soon be year over year lower by 30,000 plus per week if this inventory number is correct. It is obvious that there is a huge amount of finishing space empty in Canada. All 900,000 head would have had homes a year ago. The Canadian infrastructure is becoming underutilized. We have said many times that the flow of small pigs to the US would keep accelerating. The lower inventory numbers are a confirmation of this reality. Canadian producers continue to lose money and one of the options to minimize losses is either selling small pigs or shifting them to US farms for finishing.

Canada Swine Inventory
	Jan 1, 2007	Jan 1, 2008	Decline
Total Swine	14,907	14,010	-6%
Breeding Herd	1,579.1	1,549.1	-2%

The Canadian breeding herd shows a decline of 85,000 from its peak three years ago. 1,634 now down to 1,549 million. In the same time period that Canada declined 85,000 the U.S. has increased 188,000 sows. Some pundits expect Canada to liquidate all the sows necessary to correct supply. It won't happen. We expect Canada will continue to decline before the dust settles (85,000 done). In our opinion liquidation in Canada has accelerated since January 1st just as it has in the United States.

More on China

There continues to be a good chance of more pork being exported to China. We understand the hog price in China last week was $3.30 a kg liveweight (a 220 lb pig liveweight was receiving $330 US per head). Let's be honest, it doesn't take a rocket scientist to figure that if you could buy hogs for 30% of the price of the China market, someone should be able to get some sold.

The Chinese price is a culmination of disease, high feed prices (wheat $16.00 US a bushel last week) and liquidation. A market hog of $330 is not far off a Chinese worker's annual income. Especially if you thought they might die. If you had a few hogs would you not sell them if they brought you several years' income? High prices are liquidating backyard pig farming which is a significant percentage of Chinese pork production.

We understand that the Chinese government is using pork in storage to meet demand. When the pork in storage is gone, we expect to see greater export opportunities. The biological and logistical capacity to increase China's production will lag the demand for pork for all of 2008.

Big Sky

Interesting comments last week from several readers about the Saskatchewan government's 69% ownership of the 50,000 sow Big Sky Farms. All comments were extremely negative about the government involvement. There is no place for government to own pig production in competition with other producers and taxpayers. Lets hope the new government in Saskatchewan which is not socialist (like the previous one) decides to get out of this foolish investment.

PRRS

The reports of huge blow ups of farms with this new strain of PRRS just keep coming. Whatever you do, watch your bio-security and use quarantines. Huge sow death losses, abortions and dead pigs are impacting the business. If it keeps spreading, it will significantly cut hog numbers in the coming months.

Appointments

Genesus is pleased to announce that Tony Moulds and Dennis Stevenson have joined our company.

Tony Moulds

Tony studied at Bishop Burton College in Britain, and then managed a nucleus unit for Newsham Hybrids, before moving to National Pig Development, where he worked in the export department for 11 years. In this role, Tony gained experience of pig production in North and South America, Africa, Asia and Europe.

He moved to Canada to manage National Pig Development (NPD) Canadian multiplication system. In 1997 established Partners in Genetics, a distributor of Genex (NPD) breeding stock.

Tony was instrumental in developing the concept of a co-ordinate group of independent producers, negotiating long term contracts and establishing Rocky Mountain Pork in 2000. In 2001 Tony and partners formed Danbred Canada. As president he was involved in the first importation of Danbred to Canada. Subsequently nucleuses, multiplication, marketing and sales were established. For a time Tony was responsible for Danbred sales and marketing in Canada and USA.

We are pleased Tony has joined our company, his experience, knowledge, industry contacts and entrepreneurial drive will enhance our sales team domestically and internationally.

Dennis Stevenson

Genesus is pleased to announce the appointment of Dennis Stevenson as Operations Manager.

Dennis is a graduate of University of Saskatchewan.

Dennis previous experience includes:

• Quadra Group 1996 - 2001 Unit Production Manager - Operation Technical coordinator and Production Trainer.
  
  
• Enterprise Swine Systems (Dynamic Pork) 2001 - 2003 - Production Manager 3600 sows.
  
  
• Sunnydale Farms Ltd. 2003 to present - Production Manager 3000 sows farrow to finish.

Dennis has extensive experience with Genesus managing the Sunnydale operation. Sunnydale's Clearview unit achieved 28.30 weaned and the other Ashwood 25.60 on Genesus 25+ Award list. We look forward to Dennis bringing his people's skills, production expertise, analytical ability and logistic knowledge to Genesus.