The First Power In Genetics

January 22, 2007

By Jim Long, President, Genesus Genetics

Banff Pork Seminar

Went to the 36th annual Banff Pork Seminar this last week held in Banff, Alberta. It was our first time in either Banff or Alberta. Approximately 800 people registered for the event.

Some Observations:

The town of Banff is in a national park, nestled in the Canadian Rockies. It is an extraordinary setting.
The seminars stretch over three days and focus mostly on production issues.
At the event, we heard from several producers and veterinarians that the circo-virus vaccines are effective. Better on the small pig inoculation than the sow program. One large Quebec-based producer characterized the results in their operation as a ‘miracle’ and that half a dose administration was working for them. We understand that the supply of circo vaccine is becoming better.
The demand for small pigs for importation the US remains strong. Several US entities were trolling the event, looking for pig sources.
One Albertan producer told us that the current gross revenue difference between Alberta and Iowa is $18.00 per head for market hogs. He wondered how long such a disparity could remain without production implications.
The Deputy Premier of the province of Saskatchewan spoke about government agriculture policies. He was really, really boring. It was hard to stay awake. Suggest that he is never asked back.
One of the major topics of discussion was $4.00 corn. One ag-economist speaking said that the hog industry would not be profitable in 2007 due to feed cost increases and pork production expansion. We do not agree and question the economist’s credibility when he conjectured that ethanol by-product production would be so great that it might be railed to the ocean to be dumped to get rid of it. Corn by-product is currently not being discounted relative to its feed value.
A feed company executive speculated to US that corn could spike to $6.00 a bushel in 2007, and oil would get below $50.00 per barrel. This, he conjectured, would put ethanol plants uncompetitive as fuel sources. He expected several corn ethanol plants financial failures in the next three years. Obviously, $6.00 corn wouldn’t be good for the livestock industry either.
Another speaker showed the remarkable yield gains by corn hybrids over the last few years. He showed that barley yields have remained static. The lack of barley yield increases is limiting farm revenue. It was speculated that the lack of breeder patenting rights in barley and small grains is discouraging corporate research in barley seed. Barley yield increases would help the Canadian pork industry be competitive.
Brad Knudson of Cargill presented the following cost of production numbers for 2006 of various countries (farrow to finish)

Iowa Pork Congress

Iowa Pork Congress – the Premier Winter Pork Congress is January 24-25 in Des Moines, Iowa. Do not miss this opportunity to see and hear what’s going on in your industry. www.iowaporkcongress.org

Cost of Production $US (live weight)
USA	$0.83 kg	39¢ lb
Canada	$1.00 kg	45.4¢ lb
Brazil	$1.12 kg	51¢ lb
Japan	$2.27 kg	1.03¢ lb
China	$0.91 kg	41.4¢ lb

If Knudson’s cost of production numbers are right, Canada has a $14.00 per head cost disadvantage to the US. Seems too great to us but when coupled with lower hog prices, it is no wonder that Canada’s breeding herd in contracting. Knudson’s numbers show a cost difference of $30.00 per head between Mexico and the US. If you look at Japan’s cost of production that is $150.00 per head higher that the US, its no wonder that they import pork.

Knudson presented data from Agrinetics Associates Monitoring Services of wean to finish pigs (6 to 119 kgs). The data indicated feed conversions have improved from 2.8 to 1 in 1995, to 2.51 to 1 in 2006. This is probably due to a combination of better feed and genetics. Feed efficiency is going to be a much greater driver of business decisions in the future.

Markets

A week ago, we projected the Iowa-Minnesota price (at the time 55.61) would reach 60¢ plus within two weeks. A week later and Iowa-Minnesota is 60.24. The holidays are over and full week marketings are strengthening prices.

Hog weights are running 1.4 lbs lower than a year ago with last week’s US hog slaughter 1.5% lower than a year ago (2006-2.104 2007-2.073). Fewer hogs and lighter weights reflect hogs being pulled ahead. We do not expect Iowa-Minnesota hogs will be below 60¢ lean again before the fall of 2007.

This week, we will be at the Iowa Pork Congress and next week report our observations.

“Every calling is great when greatly pursued.”
-----Oliver Wendell Holmes

30.02

There are 7.5 million sows in Canada and the United States on 40,000 plus farms The latest annual PigCHAMP data mean indicates pigs weaned/female/year is 20.63.

30 pigs per year has been the dream of the industry for a generation. Dream has become a reality. We are proud to announce that the first farm in North America to reach 30 pigs in a calendar year is a Genesus Genetics customer. Woodland of Manitoba reached 30.02, a farrow to finish operation.

These results are a testament to the ability and professionalism of the Woodland staff that consist of Jack Hofer, Manager, Andy Gross, Breeding Manager, Mike Hofer, Farrowing Manager, Rick Hofer, Derrick Hofer, Irvin Gross and Dwayne Hofer.

Of note Woodland’s day to market are 155 days, birth to market mortality is 11% while receiving grade premiums at the very top of their packer’s grid. Woodland’s goal for 2007 is 32 pigs weaned per sow in the calendar year. The bar is continuing to rise.

30.02 Summary

An extraordinary amount of healthy pigs that growth fast and get top prices in the market place. A powerful combination. It is why Genesus is The First Power in Genetics.

Woodland
Herd Performance Monitor
01/01/2006 to 12/31/2006 (12 month) Period(s)

Total Number of Matings……………………………………2629
Percent repeat Services……………………………………..4.0%
Percent Sows Bred by 7 Days……………………………..96.3%
# Females Farrowed………………………………………….2292
Average Parity Farrowed…………………………………….3.3
Farrow Rate………………………………………………………88.8%
Adjusted Farrow Rate………………………………………..94.2%
Avg. Gestation Length……………………………………….116.2
Avg. Farrow Interval………………………………………….142.7
Avg. Pigs Born / Litter……………………………….….13.9
Avg. Live pigs Born / Litter……………………………12.8
Avg. Birth Weight / Live Pig (Kg)…………………………1.5
Percent Stillborn………………………………………………..6.2%
Percent Mummies……………………………….…………….2.1%
Litters / Mated Female / Year……………………………..2.58
Pigs Weaned per Female Weaned………………..11.7
Number of Pigs Weaned…………………………………….26354
PreWeaning Mortality Rate…………………………………8.4%
Avg. Wean Weight / Pig Weaned (Kg)………………….6.8
Avg. Weaning Age…………………………………………….17.4
Adjusted 21-Day Litter Weight (Kg)…………………….89.3
Pigs Weaned/Mated Female/Year........30.02
Pigs weaned / Crate / Year………………………………..162.7
Weaning to 1st Service Interval…………………………..5.2
Average Female Inventory………………………………….921.6
Death Rate……………………………………………………….2.3%
Gilts Entered……………………………………………………..553
Replacement Rate……………………………………………..60%
Litters / Crate / Year………………………………………….15.2
# Litters Weaned………………………………………………2519
First Service Age……………………………………………….239
NDP/ Mated Female / Year…………………………………22.9
PD / Mated Female a Year………………………………….342.1