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Pork Commentary: Ohio and China

by 5m Editor
15 February 2012, at 7:52am

US & CHINA - This past week we attended the Ohio Pork Congress held at the Crowne Plaza Hotel in Columbus, writes Jim Long.

Our observations:

  • Ohio has 170,000 sows according to the last USDA Hog and Pigs Report or about 3.5 per cent of the US sow herd.

  • Ohio does not have large hog numbers but the Ohio Pork Council is doing a very good job promoting pork. The night before the Congress there was a Taste of Elegance pork tasting reception prepared by in state chefs. It was held beside the State Legislature and several State Senators and representatives attended. The interaction between the politicians and producers definitely highlighted the advantages of pork to Ohio. It appears the politicians like pork! In our opinion the reception was a good investment for producers to help connect with the politicians.

  • In Ohio there are finisher barns being built but little if any noise about new sow units.

  • We had some competitive drug company reps asking if our opinion on Pfizer’s Chemical Castration vaccine had changed – of course it hasn’t. We don’t see it as a positive for our industry to market pork with consumers and see no upside to risk our employee’s reproductive capacity with an accident at vaccinating. For what it’s worth, the other drug company reps saw it as a great Pfizer folly with 10s of millions of dollars spent to develop chemical castration vaccine with little thought to its real need or desire in the swine sector. Is it dead on arrival in America?

  • Ohio swine producers made a pact with the uniquely special Humane Society of the United States, whose main goal appears to us, is for everyone to eat lettuce. The pact is a legal initiative to eliminate gestation stalls in Ohio by 2025. Ohio in retrospect made a smart deal. They made a deal with long timelines on a subject (gestation stalls) we can’t win. Let’s hope until 2025 the lettuce eaters will leave Ohio alone.

  • Ohio like other parts of the US is getting hit hard by prrs. This past week we heard further reports from across the USA. and Canada of further prrs breaks. It appears filtered barns have limitations on prrs prevention. With the astronomical cost of their installation and operation it will be increasingly difficult for people who are actually spending their own money on filters to justify their investment. We increasingly believe the massive levels of prrs breaks relative to other years is large enough to cut summer hog production. With expected lower beef and chicken production in the same time frame, hog prices could accelerate beyond current summer lean hog futures in the high 90s per pound or "hang on cowboys we are going for a ride!"

China

This past week a Genesus team lead by Mike Van Schepdael Vice President – Shareholder signed a major agreement with Best Genetics in Beijing China. At the signing we were honoured with the attendance of Canada’s Prime Minister Stephen Harper, and Canada’s Agriculture Minister Gerry Ritz. The founder of Best Genetics is Monita Mo. The first phase of the project is $21 million US Genesus will supply Genetics and continued genetic improvement and technical management.

The Genesus team also visited COFCO with Minister of Agriculture Gerry Ritz. COFCO is China’s largest agri business and Genesus has supplied all of the registered purebreds that COFCO has in their swine production system. Genesus beginning last year has been supplying ongoing genetics and genetic improvement to COFCO. COFCO owns approximately 5 per cent of Smithfield Foods shares.

To say the least it was a big week for Genesus. China has 47 million sows in their latest inventories. This is a huge market but still limited access with tough health and quarantine restrictions. The Chinese restrictions have prevented some of the leading Genetic Companies whose health has not measured up to being stopped from exporting!

To keep it all in perspective in a 47 million sow market only just over 6,000 breeding animals were brought to China in 2011 from everywhere in the world - a drop in the ocean.

Over the last while we have had some customers in North America ask if it’s bad for North America – for Genesus to export our technology. The questioners are customers, they have seen our results. Our answer - The amount of capital needed to fund Genetic Research is significant. Export sales fuel genetic progress. This genetic progress benefits North American producer’s productivity and profitability. We believe that if you don’t have continual improvement you die.

Also like computers, cars, etc... technology is going to be purchased and adapted by countries when they see value. You can’t stop the inevitable. America is No. 1 in the world in innovation, No. 1 in productivity. North America is the best long term place in the world to produce pork. Go harder – go faster.