Jim Long Pork Commentary: December 04 2017

Le PORCSHOW – Quebec, US new Grade’s and Danish Woes Continue.
calendar icon 5 December 2017
clock icon 7 minute read

Le PORCSHOW – Quebec

Last week we attended the Quebec PORCSHOW that was held in Quebec City. Over 1,000 people registered for the conference, expo and festivities. We have travelled and attended Pork events all over the world; Le Porcshow, we have to say was one of the best organized, first class event we ever attended. Excellent speakers (with translation provided), a vibrant industry exhibition area and social festivities well organized, well attended, with excellent social events and food (featuring pork)

Quebec has just over 300,000 sows. Relative to the rest of the world, it is not a huge production base. It was amazing to us the resources and organization that was put into this event. The attendance of over 1,000 people paying, we understand $175 each, got full value. In our opinion to keep a vibrant progressive pork industry it is important that there is a positive social component. This well organized first-class event certainly left an impression with us that the Quebec industry has a dynamic future. We expect it made most, if not all attendees, feel the same. We would suggest that swine exhibit organizers, who find their shows are being challenged for participation and funding, should visit Le Porcshow for some ideas.

US new Grade’s

Last Michael Young, Vice-President at Canada Pork International, spoke at Le Porcshow that Canada exports 70% of its pork production. Regarding the proposed new U.S. grade system of Prime, Choice and Select is was his opinion that Canada would have to follow U.S. system quickly to sustain export markets. He applauded the U.S. initiative as a positive step to align eating attributes to the grading system.

Mr. Young called the U.S.D.A. Choice Grade in Beef, the gold standard in Global markets, and speculated that U.S.D.A Choice Pork could do the same.

We spoke to several Canada Packers at Le Porcshow; the consensus is U.S. puts in new Grade system, Canada need to follow out of necessity to maintain markets.

Bottom-line, if packer companies are asked for Prime-Choice Grading by their buyers, it will be hard to say “no, we aren’t doing that”.

Danish Woes Continue

Quoting Shakespeare’s Hamlet, the Danish Prince “To be, or not to be, that is the question”

A couple of weeks ago we wrote of the travails of DanAvl (Danbred) in Denmark. The reorganization of the company has lead to 42% of the nucleuses and multiplication to form a new company -Danish Genetics-.

Following is a translation of press release from Breeders of Denmark:

“After a very long period, without any communication about Breeders of Denmark and Breeders France’s position on the new DanAvl structure, we can finally answer the direct questions asked by many since DanAvl decided to cancel their contracts with all their partners, at the end of the year 2015

L & F and SEGES (DanAvl) in Denmark decided to create a new structure proposing conditions and contract proposals to which some of the historical partners did not wish to join.

Breeders of Denmark did not wish to be part of this new structure

SEGES DanAvl terminated our contract in 2015 and after an extension requested by DanAvl, our notice period was set to end on 30.04.2018. Until that date, Breeders of Denmark and Breeders France could remain DanAvl authorized dealers and retain the right to market animals from Danish and foreign breeders and multipliers

In addition to Breeders of Denmark, another dealer DTL A/S and 24 Danish breeders and multipliers, owners of 42% of the Danavl purebred breeding stock, did not wish to continue with DanAvl after the creation of the new structure. They quickly established an independent group with the aim of finding a way to continue their work as a reseller, breeder or multiplier, without giving up their independence. In the group you will find breeders who are known and respected all over Europe and elsewhere, for their ranking as the best breeders in Denmark offering DanAvl genetics

The group believes that their rights, as owners and business owners, is violated. They also believe that the partners behind the new structure, Danish Agro and DanBred International, will benefit from the position it will provide, creating a balanced competitive situation.

The breeders and multipliers, following the initial plan, had to leave DanAvl permanently on 31.12.2017 and DTL A/S and Breeders of Denmark on 30.04.2018

However, all the members of the group had the will to leave DanAvl as soon as possible and today the 20.11.2017 this became possible. With the help of the lawyers, the group managed to reach an agreement with Seges DanAvl and was thus able to advance the partnership's closure to 31.12.2017
The partnership between the group of 24 breeders, multipliers and the two resellers with Seges Danavl stops definitely by the end of 2017 and the animals marketed from 01.01.2018 will now be marketed under the name DANISH GENETICS.

Breeders and multipliers continue after 1 January 2018 to produce breeding stock with the same selection criteria as they have up till now. With a pure breed base equivalent to 42% of DanAvl's current total, Danish Genetics starts with a solid foundation for the production of the highest quality breeding stock and these animals will all be marketed under the name Danish Genetics from 1 January 2018

Eventually, and at the latest on January 1, 2019, the breeders and multipliers of the group and the two resellers DTL and Breeders of Denmark, foresee the creation of a new genetic program, a new genetic created on the DanAvl bases, but entirely devoid of links with DanAvl”

The new company, Danish Genetics, is a sign of a tremendous rupture in what was once a consolidated Danish Industry. Our observation is; what started as a power move to cut the profit margins of the global distributors of DanAvl, has now turned into what we expect will become a Civil war (to be, or not to be?). With approximately each organization having an equal production base and without a doubt, the same genetics, the only way to compete with each other is on price.

We expect the big battlefield will be Denmark itself, as each company battles for the business of their neighbours. We expect tremendous financial loss as they cut prices in the Danish market. Globally, in the past, there were 11 distributors, who basically competed on price, we see little change. One of the casualties of the split will be, diluted capital for research and development for genetic improvement. What once was one organisation doing R&D, now is two. Couple the greater financial losses coming, with what we understand is the financial pressure of a Danish production base that is heavily indebted; we expect to see many crazy things in the months ahead.

“…though this be madness, yet their methods isn’t” – William Shakespeare (Hamlet)


DanAvl, we considered a great competitor. Their 11 distributors were globally effective. They were growing in the Global marketplace. To us this Danish rupture is amazing. To us jealousy and greed is destroying what was a quite effective competitor. Once it was one united organization; now this will be replaced by two smaller, resource and genetically diminished groups, who thankfully (for Genesus) will spend their time and resources, fighting each other. A family squabble is always the most personal and emotional. Let the battle begin.

To quote Shakespeare’s Hamlet again “Something is rotten in the state of Denmark”

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