JIM LONG'S PORK COMMENTARY

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December 18, 2006

By Jim Long, President, Genesus Genetics

Authorities Raid Swift

Last week’s raid of Swift slaughter plants by US government officials in search of undocumented workers appeared to do serious damage to the psyche of the hog market.  The Iowa-Minnesota lean price last Friday was 53.95, down from 61.71 the same day a week before.  This would be near $16 per head decline, which takes hog producers into the red.

When we talk about the psyche of the hog market, it is as much about the concern of most if not all plants, worried that what happened to Swift could happen to them.  Without knowing any facts, we surmise that the demand and need for workers to keep plants running leads to the hiring of workers whose legal residency status could be less than ideal.

The affluence of American society coupled with a generous social safety net system is not conducive to find workers willing to labour in slaughter plants or in hog barns.  To keep the wheels of the American food system turning some packers and farmers are pushed for economic self preservation to hire workers with questionable legal status.  American consumers have the cheapest food in the world.  Cheap food sustains the overall standard of living.  If the average consumer was spending 40% (as in some countries) instead of the current 10% of disposable income on food, would there be as many cars, houses, televisions, holidays, etc?  America’s cheap food is the impetus of a standard of living second to none.  The pressure of companies like Swift to deliver and compete in a global economy pushes the need to find workers at any risk.  This need has to be facilitated with new worker policies that do not make criminals of companies and/or workers willing to fill jobs that it appears no one else wants.

We remember being in a hog slaughter plant in Mexico not very long ago, not far from the US border.  Workers at the plant were receiving just over $1 an hour.  They were working hard.  Food in Mexico is more expensive than the US.  Obviously, these people do not live affluently.  There were no cars in the parking lot, just bicycles.  As we watched them work, we could rationalize little reason, that would keep them from wanting a different life in a different country.  The pull of America is not that far away.  Willing workers for a needy industry.  In Canada and the US, we are all descendants of immigrants.  All came looking for a better life.

Manitoba Hog Days

Last week we attended Manitoba Hog Days (industry trade show) in Winnipeg.  Our observations:

• Manitoba is the only province in Canada that has increased its sow and market hog population over the last year.  All other provinces have declined.

• Statistics Canada indicates Manitoba’s pigs born alive to be over 26 per year.  The rest of Canada is 21 per year.

• The Manitoba government’s moratorium on all new hog barn construction is being interpreted by the producers that we talked to as a form of industry discrimination - 99% political, 1% science.  The urban-based socialist government has in a Machiavellian way counted the votes.  Not enough pig farmers which are easy targets for the Green environmental agenda of the socialists.  At the same time as environmentalists chase some pig manure, the City of Winnipeg (population 650,000) dumps its effluent directed into the rivers and lakes with only minimal treatment.  Hypocritical is spelled with an H.

• Last week in commentary we discussed the pull out of Olymel and Big Sky in the proposed new $200 million Olywest hog plant in Winnipeg.  We quoted Guy Baudry, Hytek’s vice-president as he said that Hytek (40,000+ production system) was committed to complete the 200 million dollar plant on its own.  The producers and industry people that we talked to at Manitoba Hog Days look at Hytek’s intention to proceed on their own with a mix of disbelief and humour.  None believe Hytek has the financial resources or expertise to carry the project on their own.  Their only hope is sucking the government into financial support.  The same government that doesn’t want any more hog barns?  The laughter we heard was from industry participants that find Hytek’s planned project nothing more than an exercise of vanity.  From our perspective more and new shackle space is always positive for hog producers and we wish Hytek luck.  But, as we said last week, do not bet the farm it is ever going to happen.

• We heard several times at Hog Days that Olymel is interested in selling the Red Deer, Alberta slaughter plant.  Olymel is losing $1 million a week in operations across Canada.  They are a Quebec farmer co-op.  Alberta is not in their core area.  We are not surprised by this story.

• Every year, Manitoba Hog Days has a carcass competition (36 participants).  Almost $50,000 is raised for charity.  This year Genesus Genetics customers were ranked in 6 of the top 8.  The winner was a Genesus customer, Suncrest Colony.  Suncrest has weaned 28.8 pigs per sow year to date.  Congratulations to Suncrest and all the other Genesus winners.

Rolling Stone Hits Smithfield

The Rolling Stone Magazine’s December 14, 2006 issue does a hatchet job on Smithfield Foods and the hog industry, attacking in a dillusionary way all aspects of hog production from an activist environmental and animal welfare perspective.

Mainstream press attacks on our industry, despite specifically fingering Smithfield, blows back on all of us.  They are an easy target, but we all suffer.  Read the article.  Judge for yourself.  We are at war not negotiation with these lunatics.  The animal rightists and environmentalists see us as easy targets.  If we do not fight back our industry will get pecked to death.  Joe Luter III, Smithfield Food’s chairman was quoted several years ago as saying Canada-USA’s growth was over.  Society pressures could drive our cost of production to uncompetitive levels as they have in Europe.  Unless you want to live in Brazil or Ukraine, we must fight with a concerted effort to protect our industry, investment and livelihood.  Realistically priced food has sustained our society’s standard of living for generations.  Our battle to stop the environmental and animal rights activists is a noble one, for not only our own children’s future but generations that follow.  We must learn from history as many great civilizations decline came from their lost ability to produce their own food in abundance.  No society can remain great without the ability to feed itself.  Abundant food, domestically produced is the path to affluence, freedom and security. 

“The history of free man is never written by chance but by choice – their choice.”
                                                            ------Dwight D. Eisenhower
 
     

Manitoba Hog Days
Pork Quality Competition

Last week at Manitoba Hog Days there was held the Annual Pork Quality Competition. The winner of the competition was Genesus customer Suncrest Colony.

Winning Result:
Carcass weight……89.7 Kg
Fat (mm)…………….16.0
Lean (mm)………….70.5
Meat Yield……………62.2
Index…………………..116

• 6 of the top 8 in the competition use Genesus Genetics. These include Huron, Shady Lane, Netley, Woodland, and Milltown Colonies.
• Over $50,000.00 was raised for various charities from the competition making winners of not only the participants but the various recipient charities.
• We congratulate Suncrest for not only winning the competition but also for accomplishing excellent results:

Pigs weaned/mated female/year (Jan1-Nov 30)……28.6

• Maple Leaf Foods – 12,995 shipped

Max Gold Index…………………………112
Average Carcass Weight……………91.57 Kg
Average Backfat…………………………17.4 mm
Average Loin………………………………59 mm

• We congratulate all Genesus customers for the excellent results in the Pork Quality Competition and their donations to charity.