Jim Long Pork Commentary: World Pork Expo Report
Tue, 13 Jun 2017
Last week the World Pork Expo was held in Des Moines, Iowa. The World Pork Expo is the largest Global Swine Event held annually. Our WPX report.
- The WPX benefited from great weather, sunny and warm. Perfect weather for the outside tent set up many companies use.
- There were reported 20,000 visitors to WPX. A huge percentage American but also visitors from Asia and Latin America. A few Europeans but not so much.
- The mood of producers seemed to be optimistic. Profits are good currently. Not sure it would have been as optimistic if WPX had been held in April when hogs and futures were $30 per head lower.
- There is sow herd expansion. How much we are not sure. One of the big factors is the ongoing difficulty to get new sow units permitted for construction and usage. We believe this is a big factor slowing expansion.
- The real busy equipment companies at the WPX were the companies selling for loose sow housing. The push in new barns and renovations to this type of production was very evident.
- Lots of new foreign equipment companies showed up with most from China.
- The evidence of consolidation was everywhere. Fewer Feed companies, Genetic suppliers, Builders etc. The reality Fewer suppliers for fewer producers.
- In Swine Genetics its evident the US industry is moving more to Duroc sires. The ability for a Duroc to grow and its offspring to live is driving demand. Couple that with better tasting pork and you have a growing market. At Genesus we are happy this is happening. Genesus has the largest registered purebred population of Durocs in the world. In north America 1600 sows. In Asia and Europe 2100 sows. 3700 sows total. Better Growth, Better Livability, Better Cost of Gain, Better tasting Pork.
- At WPX there was discussion that packers had pulled hogs ahead. Packers margins have been good if not excellent. This has led to aggressive hog procurement. If this is correct hog prices can have quite a surge in the coming weeks as heat cuts weight and seasonal supply declines. There was talk of 90¢ lean hogs. We expect we will see that price at some point. The spectre of the new packing plants coming on stream later this summer adds another dimension that enhances opportunities.