Iowa with approximately 25 per cent of all pigs in America is the home for this premier winter show. As usual there were a large number of exhibitors and many attendees. Anyone serious to sell in the United States knows this is the must be at exhibition.

Our Observations

• The Congress was well organized and the venue in Des Moines is excellent. Congratulations to Doug Fricke and the many others that made such a successful endeavour.
• We talked to many producers and industry participants on how they see the direction of our industry.
• To be blunt we have never heard so many diverse opinions. Some believe there is major expansion ongoing, much of it driven by Veterinarian managed production groups. While others see the industry is in a holding pattern with little production change. The third group talks about the trauma of $40 per head losses and are next to suicidal. As we said earlier tremendous diversity of opinion, probably the most we ever heard in one place.
• You have a sense the industry is under siege from Animal welfare groups like HSUS and PETA. The spectre and cost of alternate sow housing hangs over the industry. The reality of the capital investments ($300 per sow) for our industry which has had too many months of negative profits in daunting. Compound this with ever increasing time and cost to maintain auditable production records for packers to defend us all from intrusive government, food safety and animal welfare leads many producers to wonder where the future is?
• Drought, Drought, Drought. The mid-west counties dry in most places, any other year in January it would not be much of an issue. This year because of last summer’s drought totally different story. Our industry is on edge. The hog price will probably be 10 per cent either way of today’s lean hog future for the next twelve months. In all likelihood hog production will have little change either way. The wildcard we heard over and over again is crop size and feed prices in 2013. Lean Hog Prices are historically strong, but there are over shadowed by ever stronger feed prices. It rains $5.00 corn? It doesn’t rain $9.00 corn. Cost of production range up to $50 head. The difference between success and failure. Extremely volatile and unprecedented. Pray for rain.

Markets

Last Thursday the National Daily Lean Hog Carcass price 53-54 per cent was $87.25/lb. A month ago it was $80.76. A year ago $85.53/lb. Hogs have gained about $15.00 per head in value since the first of the year. Hog Prices are now higher than a year ago with about the same weekly marketings (2,160,000). We expect to see hog prices to slowly continue to rise, this on our expectation that the liquidation that began last July will soon begin to be reflected in fewer hogs year over year coming to market. As far as market inventory we got strong indications from the Iowa Pork Congress that there are significant numbers of empty finishing barns. Our expectation despite what the USDA Hogs and Pigs Report indicates marketings year over year will be lower in the summer months and hogs will push to $1.10 lean a pound.

This week will be at the Manitoba Swine Seminar. Genesus is sponsoring the major reception from 4:30pm -7pm on 30 January. Please join us for some refreshments and appetizers.