Pork Commentary, Jan 15, 2018
Jim Long, President – CEO, Genesus Inc.

Real Productivity

There is a myth of swine productivity results and then the reality. There is an exercise we like to do at year end to look at real productivity of the US-Canada swine productivity sector.

To do this, we need to use the combined US-Canada breeding herd inventory and then total hogs marketed from both countries for the year. We need to combine the two countries to compensate for the reality of the small pigs and market hogs sent to the US from Canada, that end up being harvested in the US.

US – Canada inventory for 2017

2017

US

Canada

Federal Slaughter number of heads

120,494,000

20,733,000

US & Canada Combined
 Slaughter Head

141,227,000

 

Breeding Sows June

6,069,000

1,271,000

US & Canada Combined
 Breeding Head June

7,340,000

 

So, doing farmer arithmetic, we take 141,227 million slaughter hogs (US-Canada combined) and divide that into 7,340 million sows to get number of slaughter hogs per breeding animal.

19.24 slaughter pigs / breeding animal in 2017

This is not exactly 25 head per breeding animal is it? Adjust either way by 100,000 sows or a million market hogs, it hardly moves the average.

19.23 is a fair representation of the real productivity, not the myth of productivity.

19.23 average also means half of production is below this number. Hard to bell curve many herds over 25 when average is 19.23. End of the day lots of room for productivity improvement in our industry.

The hard-cold facts of reality can be stunning.

Demand

The USDA is projecting that the average American will eat 222,2 lb (100.8 kg) of red meat and poultry in 2018. According to the USDA, this will be a record per capita consumption. Obviously, the US consumers are not all becoming vegetarians. As a pork producer its good to be in a business with increased demand.

Market

Christmas holidays are never good for hog producer. Too many days with plants closed.

Now holidays are over and there is obvious uptick in US lean hog prices. January 3rd , 53-54% lean hogs were 62,86 ¢/ lb; January 10th had jumped to 68.07 ¢ / lb

 A $10 plus per head increase in a week. We expect further hog price increase in a week. We expect further hog price increased in the weeks ahead probably to $75 by the end of February

Minnesota Pork Congress

This week we will be at Minnesota pork congress. If you are in the area come and‎ look up at Genesus exhibit, booth 508.

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This post was written by Genesus