Pork Commentary, June 11, 2018
Jim Long, President – CEO Genesus Inc.
World Pork Expo Report
This past week was the World Pork Expo (WPX) held in Des Moines, Iowa. The first WPX was held thirty years ago. Our Report:
It was hot and humid; Wednesday hit 98’F (40’C). We were in a tent outside most of the time and there was no doubt you didn’t need a jacket.
Attendance appeared to be good to us. Ours and other exhibitors were busy. One of the features of the WPX is the multiple barbecues ongoing. We served Genesus Loin and Ribs that were prepared by Lynch Barbecue. If there were vegans at the event you wouldn’t know it by the consumption of Pork at our tent.
Tuesday night Genesus and the National Hog Farmer hosted a reception to announce the 2018 Global Mega Producer List and honor these Mega Producers. Attendance was excellent for the first-time event. The 2018 Global Mega Producer List is at end of commentary.
Jim Long, President-CEO, Genesus Inc – at the Global Mega Producer Reception
Our observation of attendance we spoke to at the Expo was that they are positive but cautious. The industry has made money and equity levels are good, but many producers are wary on future hog pricing and feed costs.
There is some expansion underway, but we didn’t see it at a big number. Maybe net 60,000 sow herd growth in 2018. One major issue is the pursuit of labor. Last week there was a news report that total U.S. help wanted ads are greater then all unemployed. U.S. unemployment is at historical lows. Finding labor, finding skilled labor is a big challenge for U.S. hog producers and packing plants. This is a factor that will slow sow herd expansion. We understand in conversations at Expo some of the U.S. packing plants contemplating a second shift are being held back primarily by the lack of labor. The problem magnifies when many of the plants are in low population areas limiting potential employees. The labor shortage is a real issue.
Another topic of conversations held at the Expo was the ongoing U.S. pork trade issues that have developed with China and Mexico. Both major importers of U.S. Pork. It appears U.S. Pork has become collateral damage in big picture trade issues. We expect no one knows which direction this problem is heading. For U.S. pork producers a resolution would be a good idea.
Driven the same roads many years to the WPX always the first full week of June. Driving Indiana, Illinois and Iowa we saw as good of a corn and soybean crop ever.
At the Expo some of the products certainly were trying to promote themselves as having labor saving features. Need creates innovation? This year many new exhibitors from, mainly China
One innovative product was insurance being offered for disease PED, Prrs, etc.
International visitors were mostly from Mexico, China and Japan. Very few from Europe.
Its interesting that China expansion seem keen in the face of $30 U.S. per head loss, certainly in China. Simple arithmetic China 12 million hogs per week times $30 per head which equals $360 million a week going the wrong way. If China continues to net expand in the face of such big losses it will defy the historical pattern of hog production cycle.
At the Expo we heard of Packers working to develop brands that highlight marbling and redder pork. It’s logical that smart business people work to develop products that address the stated desires of consumers. More demand increases hog prices.
Genesus Tent at World Pork Expo 2018
World Pork Expo was well run and fortunately for the hog industry is a good moneymaker for the National Pork Producer Council. As usual lots going on in our industry. We are a dynamic industry and many factors affect our destiny.
This week we will be at the Alberta Pork Congress. We will report our observations.