Pork Commentary: Koreans Clue Up

by 5m Editor
29 April 2008, at 12:43pm

SOUTH KOREA - Last week, Jim Long visited South Korea. The trip included visits to Genesus customers and the honour of being guest speaker at the Annual Meeting of the Korea Animal Improvement Association.

Like the rest of the world, Korean producers are feeling the pressures of high feed costs and an unstable market.

Prices of Korean hogs have surged US$100 per head in the last several weeks as a consequence of an estimated 20 per cent of South Korean hog producers quitting the industry. Hogs prices are now US$1.50 lb US liveweight. Feed is US$490 US a ton. It takes approximately US$200 of feed to raise a hog. Cost of production is approximately US$250 to US$275 per head for 240 lb hog (approximately US$1.00 to US$1.10 US liveweight). Obviously, Korean producers have got it good right now, making US$75 to US$100 per head. Not very long ago they were losing US$50 to US$75 per head.

While we were in South Korea, there were large demonstrations against their government. Plans to allow US beef into South Korea for the first time since BSE struck the US was being opposed by farmers and opposition politicians. Beef in South Korea is maybe the most expensive in the world. Calves last week were selling for $3.50 US lb. Korea’s wholesale beef is currently US$5.50 per lb.

South Korea, for all intents and purposes produces no grain for livestock. It is all imported. Arable land is used for rice and vegetables. The average farm is half an acre. There are no lawns. In a country of 40 million people, 180 miles wide by 300 miles deep and 50% plus mountains, there is no land usage but farming and buildings. Intensive is this agriculture.

PRRS Problems

In such a climate of high costs, the need for productivity is becoming quite important. PRRS, circo-virus, etc. are hitting the Korean swine industry hard and 15 pigs per sow per year is probably the industry average. We spoke at the conference on the reality of 30 pigs per sow. The economic benefits of high productivity. The need for all of the world’s agriculture to maximize efficiencies of pork production. 7000 lbs plus of pork per sow per year and the necessity of whole herd feed conversions of under three to one. The technology is available. Inefficiencies are a waste of our world’s limited resources and poor results restrict profitability. We were pleased to meet Korean Genesus customers that are using our technology to break out of the norm. Pushing over 25 pigs and seeing adaptation to the environment that has dropped mortalities. In 2007, South Korean data indicates Genesus was the leading swine genetic supplier to the country. It is quite rewarding to see the hard work we that we do genetically being recognized in a country so far from home.

South Korean swine market’s primary cut of pork is the belly and it has the highest price. We had thick cut fresh belly on a barbecue more than once. If you have never tried it, you should. The market also gives a high premium for intramuscular fat. Lean is not king in this market. Flavour and colour is far more important.

Expect Surge

We have been of the opinion for months that the high grain prices were causing liquidation of the sow population globally. Case in point, South Korea. There, fewer sows have pushed prices to levels incomprehensible for us in North America. The benefit for our market is the recent price surge in market hogs and it’s because of real global pork demand. After all, we still have record seasonal hog marketings. Fortunately, US$1.50 per lb liveweight hogs in Korea are leading to more pork coming from North America. Expect our prices to continue to surge as global demand increases while our liquidation starts to cut our supply.

A Long-Lived and Long Man of Values

While in South Korea, I learned that my Grandfather Long had passed away - he was almost 102.
He has been a major influence on my life. Like many farm families, my parents had a home beside my Grandparents’ house on our 10 acre farm. We had mink, egg chickens, apple trees and small fruit stand. Our two houses were like one. My grandparents and parents had one car that we shared until I was twelve. Everybody worked before and after school. On weekends, we got to work all day. If there is a protestant work ethic, we lived it. You worked to live and lived to work. Didn’t know any different.

My grandfather was a person of honour and ethic. He was married to my grandmother for 71 years when she passed away at 96. They had been apart five days in their entire marriage. He never drank alcohol or smoked, but never judged anybody who did. He was civic-minded, a school board chairman and church leader, and as a businessman, the company he founded with his family reached US$50 million in sales.

Elmer Long was my Grandfather; at 102 he lived long past his contemporaries and that made him sad. Many times he said that everyone he knew were dead. It is my honour that he was my Grandfather. I only hope that the values he lived of honour, ethics, trust and perseverance are inheritable. They are values that I hold in his memory.

5m Editor