Our Observations

Manitoba is where Genesus has over twenty swine breeding stock production units. It is the Genesus platform base for our Global Nucleus Production.

The province of Manitoba has 330,000 sows in production. It has the benefit of a large arable land base and the opportunity of isolation that enhances high health pig production. Manitoba with the combination of production expertise, health and swine genetics has the highest pigs weaned per sow of any region in North America.

The attitude of the customers and producers we talked to at the Prairie Livestock Expo was positive. Most are optimistic when they look at the lean hog futures for 2019 as they realise there could be profit in the range of $25 per head for the coming year.

Expansion of the Manitoba sow head we believe will be minimal. We only know of two herds expanding and they both are Genesus customers. Consequently we see little growth in Manitoba production. This is in spite of excess packer capacity available at the Maple Leaf Brandon Manitoba plant.

Manitoba produces more small pigs than it has finishing barn capacity with an excess of 50,000 small pigs being shipped weekly to the US or other Canadian provinces. Last week just weaned pigs were selling US $62 (82.50 Canadian). The Canadian dollar is currently trading under .75 to the US dollar. This in itself encourages small pig exports to the US market.

Manitoba’s large arable land base and closeness to the Minnesota and the US Dakotas farm land allows Manitoba to have some of the lowest priced feed costs in the world.

African swine fever (ASF)

Like everywhere we go the conversation on African Swine Fever (ASF) and its possible side effects was a regular topic of conversation at the Prairie Livestock Expo. All know it has huge ramifications.

The question is how much pro and how much con? Crap shoot.

China update

We do business in China. Genesus exports more breeding stock to China than any other genetic company. Last week a good source in China’s feed industry told us that the estimate swine feed tonnage country wide is down 10% from a year ago.

This we expect in a combination of 1.5-1.7 million sows liquidated due to low prices prior to African Swine Fever (ASF) break. The rest we expect is from ASF complications. 10% would be roughly 60 million less pigs over a year - Big Number.

As we go forward the hog prices in China will be the indicator of supply. Currently at about 13.3 rmb per kilogram (93₵ US lb). Any price surge would indicate further cut in supply in China due to transport restrictions. There is a range 10 rmb to 19 rmb from province to province. A $150 US per head difference. Some provinces are making huge profits; other provincial producers losing their ass. We expect major liquidation ongoing in low market price provinces.

It’s like Real Estate… Location, Location, Location.