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Pork Commentary: Banff Pork Seminar

by 5m Editor
24 January 2012, at 8:07am

CANADA - This past week we attended the Banff Pork Seminar held annually in the mountain resort town of Banff Alberta, writes Jim Long.

Our Observations

  • Banff is a picturesque town set in the Rocky Mountains. It was cold at -30 degrees Celsius with record low temperatures reported throughout the region. Genesus hosted two customers from Singapore. The lowest temperature there has been 26 degrees Celsius (77 degrees Fahrenheit). They noticed a difference!

  • The funny thing was when one of our Genesus people came back from running in the -30 temperature. The looks on our Singapore guest’s faces were priceless when they realized what he had been doing. Lunacy was mentioned.

  • Genesus once again hosted a reception for Banff Swine Seminars attendees at the St. James Irish Pub. It was a great time with over 300 people joining us. There was lots of industry talk and we appreciated the many thank yous we received from customers and friends in the industry (even our competitors who came to be where the action was).

  • The speakers at the seminars covered a range of topics – some very macro in nature, others were scientific and specific. There was something for everyone.

  • Some market consensus thoughts from speaker’s and people attending.

  • We have benefitted greatly from Pork Exports in North America this past year. There is confidence that exports to China, South Korea, and Japan will stay strong through the first half of 2012. The question is the second half of the year. Will China be able to increase production, South Korea recovering from Foot and Mouth, and Japan from tsunami related production issues.

  • Industry perspective is profits in swine production have been limited. Its OK being a swine producer but it’s not great. There appears to be little sentiment for expansion. There are no simple exit strategies as there is no clamoring of people wanting to be pig farmers and buy pig farms. We are kind of marooned in the swine business, we can’t get off the island without drowning but on our island we’ve got food and its comfortable – just nowhere to go. We are all making the best of it.

  • From what we sense, producers believe 2012 will be a profitable year we will make a few dollars but won’t get rich. Prices will be good but feed is expensive. We get no sense of ecstatic enthusiasm for the future of swine production. As we said earlier no expansion plans. Swine production is not increasing beyond productivity gains.

  • A number of swine producers attending were also grain farmers. They are caught in the dilemma of wanting high grain prices but again want to make money in pork production. We got the sense that the surge in land prices is somewhat unsettling to them. We heard the words ‘land bubble’ more than once. All farmers are mostly survivors. Farming is and has been Darwinian “creative destruction“ is a principle of capitalism. In agriculture we have lived this realism; the huge consolidation in agriculture in all sectors is testimony to the continuing decades long pressure for scale and productivity. It appears to us whether it’s real or perceived there will be more grain produced in 2012 than any time in history. The world is bulled up. More land, better seed, and better technology are all geared to push production. The surest cure for high prices is high prices.

Summary

One speaker, Jeff Simmons, President of Elanco explained that world food needs will double by 2050. 70% of increased food must come from efficiency – improving technology. The main drivers of the food buyer are (a) taste (b) cost and (c) nutrition. As President – CEO of a major swine genetics company this helps focus our marching orders. We will need more pork per sow. A four ton sow is a true measure of sow productivity. We have to enhance our massive effort and investment in scientific research and development with continued rapid utilization of Genomic technology. Taste is the number one food buyer driver. We need to develop ever tender and tasty pork to increase consumer demand. We believe there should be no commodity pork but a focus on taste and quality in all pork produced. In some aspects we are immature in consumer marketing. Coca Cola, McDonalds, etc… have been real successful with consumer food products that have been consistent and tasty to the vast number of consumers. They have a wide variation in color, marbling, tenderness, and juiciness we have in the pork industry is a weakness in our opinion. Increased demand would lead to profits. If consumers got tastier pork and had one more meal of pork a month it would lead to a significant increase in pork consumption and support prices. Even if packers don’t pay for tasty pork it is wise for long term value of our industry to produce a product that consumers want to eat over and over again.